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Saturday, 5 May 2018

Now Warren Buffet is affected by market volatility???

Read? Berkshire Hathaway reports 48.7% first quarter operating gain as shareholders prepare to meet

CW8888: Hmm ... Now Warren Buffet is affected by market volatility as the Rule of the Game has changed. 

Because of accounting rule changes, however, the conglomerate recorded a first quarter loss of $1.1 billion, compared to net income of $4 billion in last year's first quarter

The accounting changes meant Berkshire had to write down the value of its investment portfolio by $6.3 billion in the first quarter

Berkshire Hathaway reported a 48.7 percent first quarter gain in operating earnings, to $5.3 billion, as its insurance underwriting business swung back into the green and railroads, utility and other businesses posted gains.

Because of accounting rule changes that apply to its $170 billion stock portfolio, however, the conglomerate recorded a first quarter loss of $1.1 billion compared to net income of $4 billion in last year's first quarter.

Berkshire marked down the value of those investments nearly $6.3 billion.

Warren Buffett had already warned shareholders in his annual letter about the accounting changes, saying the new rule could "produce some truly wild and capricious swings" in the value of the stock portfolio that would "swamp the truly important numbers that describe our operating performance."

Buffett, who is preparing to lead the company's annual shareholder meeting later on Saturday morning, told CNBC on Friday the company acquired another 75 million shares of Apple during the first quarter, adding to its already large holdings. It also exited its remaining holdings of IBM.


  1. Replies

      "A new accounting rule was introduced at the beginning of this year .. Our equity securities are marked to market every day ... that (produces) some unusual effects from quarter to quarter ... (the net earnings figure) is really not representative."


  2. Thanks to shenanigans by insurers & banks before GFC ... now US companies need to mark to market their investment assets and report paper gains / losses as part of quarterly earnings.

    Just focus on BRK operating earnings as he recommended.

    1. For retail investors, they can learn from Warren buffet and focus on dividends as panadols when sitting on large paper losses

  3. Only if U can live on dividends as panadols.

    Never try it if panadols can't make your headaches go away.

    U may ask, if never try how U know?

    If die, die must try, do U have any other standby substitutes?


    Then , "Nei lum nei", says the Cantonese.

  4. If i haven't liquidated most of my STI Stalwalts and only live on the panadols dish out by them, i don't think my headaches will go away.

    But it's only that's me - my way.

    Yet i still kind of believing in panadols for quick remedy for headaches.

    Actually it can work for anyone if the dividends for panadols is huge or large enough to cover your daily expenses.

  5. LOL! Dividend lovers will hate to invest in Buffett as he never gives dividends ... ok except for 1 time in the late-1960s when he said he must have brain damage or trapped in the toilet when the board of directors made the decision.

    Berkshire investors had to go thru 3 times -50% drops in the early-70s, late-90s & GFC. Plus another -30+% drop in the 1987 crash .... without panadols.

    Buffett only interested in commando-trained investors who can HODL without panadols or bullets ... never say die never give up... Hohoho!!

    Although many are suspecting that when Buffett declines or dies, Berkshire will start to give dividends ... as Buffett himself always said that the best way for companies to do with their cash, if they cannot find good ways to use it to grow their business, is to return it to investors.


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