Warren Buffett won’t be cheering for the French men’s soccer team at this year’s World Cup.
Buffett told CNBC today that Berkshire Hathaway will have to pay out about $30 million if the French men’s soccer team wins the World Cup, which is scheduled to start in June in South Africa.
Berkshire’s Ajit Jain, on whom Buffett regularly showers praise — Buffett wrote in Saturday’s letter to shareholders that if they had to save either Buffett, Charlie Munger or Jain, to choose the latter — recently underwrote a big bet that would pay out only if the French win the title.
Buffett didn’t mention who would receive the payment.
Jain heads a unit of Berkshire that routinely makes big bets such as that one. They’ve insured baseball star Alex Rodriguez against injury and golf tournaments against holes-in-ones with big payouts. Jain agrees to take the risks only if the premiums fairly compensate Berkshire.
The French won the World Cup in 1998 and placed second to Italy in 2006. Jain isn’t wrong very often, so his bet against the French isn’t good news for fans of that team.
Buffett made the comments about the bet during a wide-ranging three-hour interview with CNBC this morning. It’ll take you a while to read the whole transcript, but it’s well worth it (just like the above-linked annual letter). Click here to get started.