Berkshire Hathaway (BRK.A) Analysis - Stock Analysis, Stock Ratings

InvestorGuide Stock Analysis

Worst Year for Berkshire Hathaway Since 1965
Excerpt from the InvestorGuide.com Stock of the Day on 3/2/2009

On Saturday, Warren Buffett, the Chairman and CEO of Berkshire Hathaway, announced the company's annual results for fiscal year-ending 2008. Due to the economy and the financial crisis, net worth fell by 9.6 percent. In the past, his letter to shareholders (and non-shareholders) served as a barometer of the economy, as well as a forecast on what to expect in the subsequent year. In the latest one, the Oracle of Omaha stated that the economy "will be in shambles throughout 2009." With this kind of guidance, should investors expect something similar from the company this year?

Probably not. The key thing to remember is that the economy is different from the stock market. Furthermore, a lot of the damage from the housing bubble has already been dealt making it difficult to imagine further losses stemming from the subprime mortgage mess. Lastly, Mr. Buffett arguably has the best track record out of any investor in history, and the company currently holds a solid portfolio of assets. Though book-value per share declined, it was slightly better than what some analysts were expecting. In addition, many of his actions in 2008 helped the company weather the financial crisis. For example, when he purchased preferred shares of Goldman Sachs (GS: Charts, News, Offers) following the collapse of Lehman Brothers, it established a stable cash flow for the company. More >

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