5 Highlights Of Warren Buffett’s Letter To Shareholders And Berkshire Hathaway’s Annual Report

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Dr. David Kass
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Warren Buffett’s Letter to Shareholders and Berkshire Hathaway’s Annual Report were released this morning at 8:00 a.m. ET.

Q4 hedge fund letters, conference, scoops etc

Five highlights were:

(1) Berkshire Hathaway’s 2018 operating earnings rose by 71% vs. 2017.

(2) Berkshire Hathaway’s shares outperformed the S&P 500 (with dividends included) by 7.2% in 2018 and by 21% over the past 5 years.

(3) Berkshire repurchased only $400 million of its shares during the fourth quarter of 2018 vs. $928 million during the third quarter.

(4) Berkshire’s cash position increased to a record $112 billion at year end 2018.

(5) Buffett states that in 2019 Berkshire is far more likely to invest in the public market (minority stakes in companies) than in the over-priced private market (acquire entire companies).

Article by Dr. David Kass

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David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: dkass@rhsmith.umd.edu (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.