A Pocket Analysis on the Buffett Missive

Following are a few thoughts about Warren Buffett's latest annual missive. I will not review every detail, since the letter promises to be parsed in excruciating detail by every media outlet. Rather, I offer a few modest reactions as someone who attended his first Berkshire-Hathaway (BRK.A) annual meeting in 1991.

Give Buffett credit -- he sets a high bar for himself. He compared Berkshire's book-value increase to the average among all S&P 500 companies. That is not a completely fair comparison, and the S&P has the "cheating advantage." The climb in book value is an accounting equation that basically reports what Berkshire earned during the year. (Book value can increase more slowly than earnings, due to write-offs or dividends, but an increase must be tied very closely to earnings.) So Warren compares the change in capitalization of the S&P 500 not to the change in capitalization of Berkshire, but to what it is earning....707 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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