Like so many others, you probably wanted to be a fly on the wall when Warren Buffet gave his fourth-quarter report to shareholders of Berkshire Hathaway Inc. (NYSE BRK.A). Well, here's the bad news: Net profit fell 96%, the fifth quarterly straight decline and Berkshire's net worth dropped a whopping $10.9 billion in the final three months of 2008.
Omaha-based Berkshire Hathaway is a diversified company that invests in insurer Geico Corp. and such things as carpeting, ice cream, paint, and real estate services. But to quote Mr. Buffet: "the economy will be in shambles throughout 2009."
Net income for Berkshire's shares shrank to $117 million or $76.00 per class A share. Revenue fell 12% to $24.6 billion. Still with these losses, operating profit rose to about $3.4 billion.
Buffet, like many other big investors, was playing the high-stakes derivatives market and got burned badly. Berkshire lost $4.6 billion on 251 derivative contracts.
For all of 2008, profit at Berskhire fell 62% to a 6-year low of $4.99 billion, or $3.22 per share. Revenue fell 9% to $107.8 billion. Berkshire's shares have fallen 44% since the end of February 2008.
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Reader Comments (Page 1 of 1)
2-28-2009 @ 9:32PM
Joe Henderson said...
It appears Buffet tried to go the short sell/buy route, thinking a market that did not rebound, would. Pooooooooor man, down to just a few billion, but wonder how his investors and cronies feel these days.
2-28-2009 @ 11:39PM
Aqualung said...
THE ANSWER WARREN MY FRIEND, IS BLOWIN IN THE WIND
(Blowin in the Wind, Bob Dylan)
WilliamBanzai7
How many points must the DOW slide down
Before we can buy once again ?
Yes, n how many zombie banks must Uncle Sam bail
Before Federal budget disappears in the deficit sands?
Yes, n how many times must FWMD balls fly
Before they're forever banned?
The answer, Warren my friend, is blowin in the wind,
The answer is blowin in the wind.
How many times must an investor look up
Before he can see the Ponzi blue sky?
Yes, n how many ears must the SEC have
Before it can hear the whistle blowers's cry?
Yes, n how many financial disasters will it take till it knows
That too many greedy CEO's have lied?
The answer, Warren my friend, is blowin in the wind,
The answer is blowin in the wind.
How many years can a bloated asset bubble exist
Before its washed to the bear market sea?
Yes, n how many years can free markets exist
Before they're consumed by Wall Street hubris and greed?
Yes, n how many times can a man turn his 401(k) head,
Pretending he just doesnt see?
The answer, Warren my friend, is blowin in the wind,
The answer is blowin in the wind.
3-01-2009 @ 4:52AM
BHarrison said...
Everyone makes a mistake or mis-reads the market occassionally; and Buffett should be applauded for his frankness in explaining what occurred causing this loss in Berkshire-Hathaway investment.
What is more concerting to me is that when "the best" of our investment managers, like Buffett, are having a difficult time "reading and anticipating the markets", then the markets are simply too chaotic for the average small investor.
The "insider" fund managers shifted to buying zero interests T-Bills some time ago; and the latest recommendations that seem to be undertone of it all during this last week has been that now is the time to get out of stocks completely. These omnimous warning are escalating from more and more financial advisors over the last several days. It appears that the markets are heading for a bottoming out; and there is probably going to be a drastic dip in values that will be forthcoming; and then a long pause, leading to a very slow and arduous recovery.
And the American people are simply apathetically sitting back while our CORRUPT Congress who enabled and allowed all of the corporate FRAUDS, continues to allow the CORRUPT CEOs and Boards of Directors run those corporations, and to keep their ill gotten "weath" that they amassed while mismanaging the corporations, and orchestrating and perpetuating all of those FRAUDS.
Congress needs to be purged of these CORRUPT Congressmen or recovery will be difficult to achieve.
3-26-2009 @ 5:18PM
jhgonzalez2003 said...
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