投资

Last year, Berkshire’s book-value gain of 10.5% fell short of the index’s 10.9% return. Our lackluster performance was not due to any stumbles by the…

Yet if precision is aided by Berkshire’s financial characteristics, the job of calculating intrinsic value has been made more complex by the mere…

We have attempted to ease this problem by clustering our businesses into four logical groups, each of which we discuss later in this report. In these…

Before we look at our individual businesses, however, let’s review two sets of figures that show where we’ve come from and where we are now. The…

In addition to these marketable securities, which with minor exceptions are held in our insurance companies, we own a wide variety of non-insurance…

We believe that $16.9 billion is a record for a one-year gain in net worth – more than has ever been booked by any American business, leaving aside…

Charlie and I measure Berkshire’s progress and evaluate its intrinsic value in a number of ways. No single criterion is effective in doing these jobs…

In our early years we put most of our retained earnings and insurance float into investments in marketable securities. Because of this emphasis,…

Over the years, however, we have focused more and more on the acquisition of operating businesses. Using our funds for these purchases has both…

That party is over. It’s a certainty that insurance-industry profit margins, including ours, will fall significantly in 2008. Prices are down, and…

Berkshire has two major areas of value. The first is our investments: stocks, bonds and cash equivalents. At yearend these totaled $141 billion…

Insurance float – money we temporarily hold in our insurance operations that does not belong to us – funds $59 billion of our investments. This float…

Berkshire’s second component of value is earnings that come from sources other than investments and insurance. These earnings are delivered by our 66…

The table on the preceding page, recording both the 44-year performance of Berkshire’s book value and the S&P 500 index, shows that 2008 was the…

By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. A…

Take a look again at the 44-year table on page 2. In 75% of those years, the S&P stocks recorded a gain. I would guess that a roughly similar…

Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be…

A more difficult decision for us was how to measure the progress of Berkshire versus the S&P. There are good arguments for simply using the change in…

We should note that had we instead chosen market prices as our yardstick, Berkshire’s results would look better, showing a gain since the start of…

Summed up, the table on page 2 conveys three messages, two positive and one hugely negative. First, we have never had any five-year period…

Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on…

A “normal year,” of course, is not something that either Charlie Munger, Vice Chairman of Berkshire and my partner, or I can define with anything…

Over time, the movement of goods in the United States will increase, and BNSF should get its full share of the gain. The railroad will need to invest…

Last year – in the face of widespread pessimism about our economy – we demonstrated our enthusiasm for capital investment at Berkshire by spending $6…

In Berkshire’s case, we long ago told you that our job is to increase per-share intrinsic value at a rate greater than the increase (including…

Your Board is equally enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and whose managerial and…

• Our major businesses did well last year. In fact, each of our five largest non-insurance companies – BNSF, Iscar, Lubrizol, Marmon Group and…

• In total, our entire string of operating companies spent $8.2 billion for property, plant and equipment in 2011, smashing our previous record by…

• Our insurance operations continued their delivery of costless capital that funds a myriad of other opportunities. This business produces “float” –…

But subpar it was. For the ninth time in 48 years, Berkshire’s percentage increase in book value was less than the S&P’s percentage gain (a…

One thing of which you can be certain: Whatever Berkshire’s results, my partner Charlie Munger, the company’s Vice Chairman, and I will not change…

Charlie and I believe the gain in Berkshire’s intrinsic value will over time likely surpass the S&P returns by a small margin. We’re confident of…

Our luck, however, changed early this year. In February, we agreed to buy 50% of a holding company that will own all of H. J. Heinz. The other half…

On the facing page, we show our long-standing performance measurement: The yearly change in Berkshire’s per-share book value versus the market…

As I’ve long told you, Berkshire’s intrinsic value far exceeds its book value. Moreover, the difference has widened considerably in recent years.…

Charlie Munger, Berkshire’s vice chairman and my partner, and I believe both Berkshire’s book value and intrinsic value will outperform the S&P in…

Over the stock market cycle between yearends 2007 and 2013, we overperformed the S&P. Through full cycles in future years, we expect to do that again…

During our tenure, we have consistently compared the yearly performance of the S&P 500 to the change in Berkshire’s per-share book value. We’ve…

Today, our emphasis has shifted in a major way to owning and operating large businesses. Many of these are worth far more than their cost-based…

With that in mind, we have added a new set of data – the historical record of Berkshire’s stock price – to the performance table on the facing page.…

It was a good year for Berkshire on all major fronts, except one. Here are the important developments: ‹ Our “Powerhouse Five” – a collection of…

By the early 1990s, however, our focus had changed to the outright ownership of businesses, a shift that diminished the relevance of balance-sheet…

Over time, this asymmetrical accounting treatment (with which we agree) necessarily widens the gap between intrinsic value and book value. Today, the…

The unrecorded increase in the value of our owned businesses explains why Berkshire’s aggregate market- value gain – tabulated on the facing page –…

Charlie Munger, Berkshire Vice Chairman and my partner, and I expect Berkshire’s normalized earning power to increase every year. (Actual…

By the early 1990s, however, our focus was changing to the outright ownership of businesses, a shift that materially diminished the relevance of…

We’ve experienced both outcomes: As is the case in marriage, business acquisitions often deliver surprises after the “I do’s.” I’ve made some dumb…

We have no quarrel with the asymmetrical accounting that applies here. But, over time, it necessarily widens the gap between Berkshire’s intrinsic…

Over time, stock prices gravitate toward intrinsic value. That’s what has happened at Berkshire, a fact explaining why the company’s 52-year…

Despite its recent acquisitions, HomeServices is on track to do only about 3% of the country’s home- brokerage business in 2018. That leaves 97% to…

We believe that the annual probability of a U.S. mega-catastrophe causing $400 billion or more of insured losses is about 2%. No one, of course,…

No company comes close to Berkshire in being financially prepared for a $400 billion mega-cat. Our share of such a loss might be $12 billion or so,…

Viewed as a group – and excluding investment income – our operations other than insurance delivered pre- tax income of $20 billion in 2017, an…

Berkshire earned $4.0 billion in 2018 utilizing generally accepted accounting principles (commonly called “GAAP”). The components of that figure are…

The accuracy of that prediction can be suggested by our quarterly results during 2018. In the first and fourth quarters, we reported GAAP losses of $…

Wide swings in our quarterly GAAP earnings will inevitably continue. That’s because our huge equity portfolio – valued at nearly $173 billion at…

Our advice? Focus on operating earnings, paying little attention to gains or losses of any variety. My saying that in no way diminishes the…

Berkshire earned $81.4 billion in 2019 according to generally accepted accounting principles (commonly called “GAAP”). The components of that…

The adoption of the rule by the accounting profession, in fact, was a monumental shift in its own thinking. Before 2018, GAAP insisted – with an…

Berkshire’s 2018 and 2019 years glaringly illustrate the argument we have with the new rule. In 2018, a down year for the stock market, our net…