Warren Buffet bad news? That his company, Berkshire Hathaway, didn’t do as well as it should have.
Warren Buffet, the famed investor, wrote a letter to shareholders of Berkshire Hathaway Inc.’s $24.1 billion net gain for them wasn’t as good as it should be.
“For the ninth time in 48 years, Berkshire’s percentage increase in book value was less than the S&P’s percentage gain (a calculation that includes dividends as well as price appreciation),” wrote Buffett in the latter, according to MarketWatch. The Associated Press reported that Berkshire’s profit jumped 49 percent in the fourth quarter.
The firm’s book value rose 14.4 percent in 2012, which he described as “subpar.” The Standard & Poor’s 500 index rose 16 percent last year.
Jeff Matthews, who wrote “Warren Buffett’s Successor: Who It Is and Why It Matters,” said Buffet’s letter contained little surprises. “I thought it was pretty boring, and that’s good news,” Matthews said, according to AP.
In the letter, Buffett also cautioned CEOs who did not act due to “uncertainty.”
“There was a lot of hand-wringing last year among CEOs who cried ‘uncertainty’ when faced with capital allocation decisions (despite many of their businesses having enjoyed record levels of both earnings and cash),” he wrote, according to the Wall Street Journal. “At Berkshire, we didn’t share their fears, instead spending a record $9.8 billion on plant and equipment in 2012, about 88% of it in the United States.”
He added: “That’s 19% more than we spent in 2011, our previous high. Charlie and I love investing large sums in worthwhile projects, whatever the pundits are saying. We instead heed the words from Gary Allan’s new country song, ‘Every Storm Runs Out of Rain.’”
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