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Berkshire Hathaway 2013 Annual Letter


Borgesian

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I had a quick question about Berkshire's returns.  Mohnish Pabrai has mentioned multiple times a study by 2 Professors (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=806246) that shows that purchasing stocks that Buffett purchases after the news is made public and selling them after that news is made public would have earned a 11% alpha during 1976-2006.  Adding this to market return of 9-10% gives a 20% return.  Buffett has stated himself that float adds 6-7% to the returns, so the implied return on Berkshire should be closer to 26% (20%+6%).  However, Berkshire's longer-term annualized returns has been closer to 20%.  Can someone please help me understand why is there a 6% difference I'm noticing?

 

First thing that comes to mind is that Berkshire isn't just its equity portfolio. It has to hold lots of bonds for its insurance companies, and over time it became more and more an operating business. You could also look at changes in valuation by the market during that period (ie. did multiple to book go down).

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  • 3 weeks later...

I believe this depends on your setting -

in canada i didn't get them either and we had to contact the broker and they gave us a control key to enter online to download the credential request... for the meeting.  i believe you can just download the annual report from warren's website.  gary

 

 

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I received my annual report and proxy information in the mail at the end of last week (think Thursday). I use Scottrade, and am experimenting with their option for U.S. mail delivery of proxies and shareholder information rather than electronic.

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Cassius,

 

Are you going to the meeting?

 

Do any of you guys know how we can get the shareholder passes if we don't get the report? I still haven't gotten mine.

 

You can show your brokerage statement for proof that you own the shares. And you can probably get the proxy through your broker, which includes a post card that you can print out and send in to receive your materials. You should probably do that soon though.

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From Borsheim's website:

 

http://borsheimsbrk.com/events

 

Meeting Credentials

Borsheims does not issue meeting credentials. There will be a Shareholder Services Kiosk in the lobby of the CenturyLink Center for shareholders who have made prior arrangements to pick them up there. Any questions or problems that shareholders may have regarding the weekend and/or their meeting credentials can be handled at the Kiosk. Proof of ownership and photo identification are required before credentials will be issued.

 

 

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