Last October, Berkshire Hathaway paid $5 billion for 50,000 cumulative perpetual preferred shares that pay 10% a year. Buffett also negotiated for warrants giving Berkshire the right to buy 43,478,260 million shares of Goldman common stock. The warrants expire in 2013 and can be exercised for a total cost of $5 billion, or $115 a share.

Soon after Buffett's investment, Goldman shares plunged below $50, making his warrants worthless. But the stock has rallied to $112... and if they rise above $115, Buffett's warrants are "in the money."

If Goldman's stock rallies to $150, Buffett could exercise his warrants (buying shares at $115), then sell the stock and pocket the $35 difference. That scenario would make Buffett over $1.5 billion... a 30% return on investment in five months.

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