Hold your breath! (Warren Buffett)

At Berkshire we held only one direct currency position during 2007. That was in – hold your
breath – the Brazilian real
. Not long ago, swapping dollars for reals would have been unthinkable.  After all, during the past century five versions of Brazilian currency have, in effect, turned into confetti. As has been true in many countries whose currencies have periodically withered and died, wealthy Brazilians sometimes stashed large sums in the U.S. to preserve their wealth. But any Brazilian who followed this apparently prudent course would have lost half his net worth over the past five years. Here’s the year-by-year record (indexed) of the real versus the dollar from the end of 2002 to yearend 2007: 100; 122; 133; 152; 166; 199. Every year the real went up and the dollar fell. Moreover, during much of this period the Brazilian government was actually holding down the value of the real and supporting our currency by buying dollars in the market. (Leia a íntegra) – Repercussão local (aqui)

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