We all know how great Warren Buffett is as an equity investor.
Exhibit A is his incredible track record at his hedge fund (the Buffett Partnership) which he managed in the 1950s and 1960s.
Then we have his legendary stock picks for Berkshire Hathaway such as Coca-Cola in the late eighties, American Express during the salad oil scandal and of course GEICO during its darkest days.
What not everyone knows about is that Buffett has amplified his returns at Berkshire through his successful use of the float available through it's insurance operations.
For Berkshire, it is like being paid to borrow money that Warren Buffett gets to invest.
The video below discusses the recent moves by many high profile hedge funds into the world of reinsurance:
