Warren Buffet does derivatives?

From Bloomberg, via Mish Shedlock's blog:

Warren Buffett’s Berkshire Hathaway Inc. posted a fifth-straight profit drop, the longest streak of quarterly declines in at least 17 years, on losses from derivative bets tied to stock markets.
...
Berkshire shares have fallen 44 percent in the past year as the value of the firm’s top equity holdings dropped and losses increased on the derivatives.

And here I was, thinking Warren Buffet was conservative and invested only in things he understood.