Berkshire Hathaway's dollar bet

Lately, the dollar has been appreciating against the Euro, taking a look at the this graph and you can see that the dollar has moved from a low of about .73 Euros at the end of 2004 to about .82 Euros. One of the biggest bettors of a continued decline in the value of the dollar is Warren Buffett and his company Berkshire Hathaway. At the end of 2004 owned approximately $21.4 billion dollars of foreign exchange contracts (spread among 12 currencies). Given that 2004 saw a steady decline in the value of the dollar of about 12-14% Berkshire racked up large gains on its foreign currency forward contracts. From the annual report Berkshire reported $1,839 M of gains. However, since the votes in France and the Netherlands the dollar has been on a tear. What does this mean for Berkshire?

In the first quarter Berkshire reported $307M in foreign currency losses (go to page 19 of the document). And this is prior to the dollar really starting to appreciate, if the last month's trend continues second quarter losses could be about $1B.

Just something to think about.