As Warren Buffett, chairman of Berkshire Hathaway, prepares for his lengthy annual exchange of views with company shareholders tomorrow, he may be cheered by the thought that his bet against the dollar, which cost Berkshire almost $1 billion (€786.5 million) last year, appears to be on the right track again.
The topic is one the well-known investor is likely to address as he and Charlie Munger, his second-in-command, field questions for six hours at a sports arena in Omaha, Nebraska.
The event is likely to overshadow the release of Berkshire's first-quarter earnings, due today.
The company's annual meeting, a regular pilgrimage for many shareholders, remains unique in corporate America for its length, for the access it gives shareholders to the chairman and vice chairman, and for the folksy style of Mr Buffett and many of the events staged in Omaha over the weekend.
The rising dollar last year confounded Mr Buffett's conviction that US trade imbalances would gradually weaken the currency, although Berkshire was still in the black to the tune of $2 billion at the end of the year since he first began his currency bet in 2002. So far this year, however, the dollar has given back about half its gains last year.
"We expect a blow-out quarter that will underscore the incredible earnings power of this juggernaut," said Whitney Tilson, a fund manager who counts Berkshire among his favourite investments.
More important than quarterly earnings for most Berkshire investors is the longer term value of the company's collection of subsidiaries, including insurer General Re, and investments including multi-billion dollar stakes in Coca-Cola and American Express.
Mr Tilson puts the intrinsic value of the company at $125,000 a share, compared with the current trading price of about $88,000. Berkshire also has B shares worth about one-thirtieth of this value.
Charles Gates, a Credit Suisse analyst, was less bullish after Berkshire published its full-year 2005 results in March, setting a share price target of $95,000.
The extent of fall-out from ongoing investigations into General Re's role in recent insurance scandals remains unclear, Mr Gates said.
He also cited the challenge faced by Mr Buffett in deploying Berkshire's huge cash pile profitably. At the end of 2005, the company reported having $40 billion of cash, in addition to other liquid investments.
Investors also worry about succession at the top of the company. Mr Buffett is 75 and Mr Munger seven years older.
The chairman told shareholders in his most recent annual letter that Berkshire's board had agreed on a successor "if a replacement were needed today", but he did not disclose who that was.
Mr Gates noted this as a potential concern for investors. Mr Buffett, though, called Mr Munger "a wonder" at 82. As for himself? "While we are on the subject, I feel terrific."
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