In 2002, Warren Buffet described derivatives as ‘’financial weapons of mass destruction’’ in his annual investor report. Yet many insiders knew the 'Oracle Of Omaha' was playing the same game albeit quietly.
He’s since back-pedalled from his oft-quoted line. But that does not take away the wisdom of his words. Warren is right. Derivatives are a good tool if you know how to use them but a bad one if you don’t.
