Warren Buffett：Berkshire Hathaway 1979 Letter, Additional Excerpt 1

On this basis, we had a reasonably good operating performance in 1979 - but not quite as good as that of 1978 - with operating earnings amounting to 18.6% of beginning net worth. Earnings per share, of course, increased somewhat (about 20%) but we regard this as an improper figure upon which to focus. We had substantially more capital to work with in 1979 than in 1978, and our performance in utilizing that capital fell short of the earlier year, even though per-share earnings rose. "Earnings per share" will rise constantly on a dormant savings account or on a U.S. Savings Bond bearing a fixed rate of return simply because "earnings" (the stated interest rate) are continuously plowed back and added to the capital base.

Source： https://www.berkshirehathaway.com/letters/1979.html
Locator：1979 Chairman's Letter, additional excerpt 1 · Verified：2026-10-19 · Verification：Short excerpt

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