In his latest 2022 Berkshire Annual Meeting, Warren Buffett explained why there is nothing more destructive than companies reporting forecasted earnings. Here’s an excerpt from the meeting:
Q1 2022 hedge fund letters, conferences and more
Buffett: Within GAAP accounting I can play a lot of games with numbers.
We have never… we’ve done a lot of dumb things at Berkshire, we have never told anybody that the number had to be this or that or to change anything.
I mean once you start it, it’s all over, you can’t quit. It’s like taking five dollars out of the cash register you know the first time you take the five bucks out you say well I’m going to put it back and then do it a few times and you will never stop.
In fact do it once and you probably never stop but if something is going to be destructive the thing to do is not start it, and forecasting earnings I can’t imagine anything more destructive.
I got 360,000 people out there and they know whether I’m lying or not good many of them, and they know what they send in figures and they get changed you know.
What message are you telling them?
You can watch the entire discussion here:
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Article by The Acquirer’s Multiple.
