Berkshire Hathaway 2012 Annual Report

The Berkshire Hathaway 2012 Annual Report is now out, you can read the full version here 2012 was another year that Berkshire did not surpass the S&P 500 in annual returns as calculated by book value gain vs the index gain.  Book Value  gained 14.4% for the year versus the S&P 500 at 16%, and that makes it three times in the past four years that the company has under performed the benchmark. To date, we’ve never had a five-year period of underperformance, having managed 43 times to surpass the S&P over such a stretch. (The record is on page 103.) But the S&P has now had gains in each of the last four years, outpacing us over that period. If the market continues to advance in 2013, our streak of fiveyear wins will end. In Warren Buffett’s second disappointment of the year was that he was unable to make a major acquisition.  It’s been known that Buffett has a lot of cash that he wants to put to work, and with the size of his cash holdings, he needs to acquire large companies.  The hunt came to and end in February 2013 with the purchase of Heinz.  Although a major purchase…

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Berkshire Hathaway 2011 Annual Report

Berkshire Annual Report Highlights for 2011 Link to the Annual Report Below are some of the highlights that I picked up from reading the 2011 Annual Report from Berkshire Hathaway.  I would recommend reading the full report by yourself as the information provided by Warren Buffett is always worthy of being read. The primary job of a Board of Directors is to see that the right people are running the business and to be sure that the next generation of leaders is identified and ready to take over tomorrow. The per-share book value of both our Class A and Class B stock increased by 4.6% in 2011. Over the last 47 years (that is, since present management took over), book value has grown from $19 to $99,860, a rate of 19.8% compounded annually. Highlights Succession Berkshire has identified a successor for Warren Buffett and Charlie Munger, but did not state who that person is.  They also stated that the board has identified two back up candidates. New Purchases Purchased Lubrizol in September 2011 which is a producer of specialty additives and other chemicals In Marketable Securities, Berkshire purchased $10.9 billion of stock in IBM and $5 billion of 6% preferred shares of…

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