Buffett hit by $1bn junk bond loss

Warren Buffett's Berkshire Hathaway made a $1bn loss in Q4 last year on his holdings in junk bonds, according to the Wall Street Journal.

Buffett bought bonds in Energy Future Holdings and a subsidiary in 2007 at a yield of more than 10%. However, in the last two years the bonds have posted heavy losses and Berkshire says it is "unlikely" to receive all the money it is owed. Berkshire adds the bonds will either default or be restructured. At the time of purchase Buffett labelled the deal as a one-of-a-kind investment which reflected his bullish view on the utility sector as opposed to his stance on junk bonds. Meanwhile, Buffett says he is ready to start doing big deals again and in his letter to shareholders last...