The Rational Walk has published several hundred articles regarding Berkshire Hathaway. This archive displays all articles related to Berkshire except for In Search of the Buffett Premium, a research report published in 2011. In addition to browsing the list of articles, you may also search for a specific topic within the archive by using the search box below. A separate archive exists for coverage of other companies. Berkshire is sometimes mentioned in the Rational Reflections weekly newsletter which has a separate archive.

Of the tens of thousands of attendees at every Berkshire Hathaway annual meeting, it is likely that a majority have a working understanding of Warren Buffett's overall investment philosophy.  Mr. Buffett is not only the public face of Berkshire Hathaway but also has become a celebrity in recent years.  There are probably only a handful of business leaders in America who have similar name recognition.  The same, however, cannot be said about Charlie Munger, Mr ...
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The release of Warren Buffett's annual letter to shareholders is one of the most important events of the year for value investors.  This year, the significance of the letter is accentuated by the fact that fifty years have passed since Mr. Buffett took control of Berkshire Hathaway. Mr. Buffett is effectively the "founder" of Berkshire in its current form as an investment holding company and conglomerate of operating subsidiaries. Berkshire Hathaway's annual report, scheduled to ...
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I love running Berkshire, and if enjoying life promotes longevity, Methuselah’s record is in jeopardy. -Warren Buffett, Berkshire Hathaway Owner's Manual Berkshire Hathaway will soon reach an important milestone with the fiftieth anniversary of Warren Buffett's control of the company.  Nearly forty percent of Mr. Buffett's tenure at Berkshire has been accomplished as a senior citizen and he is clearly not ready to retire anytime soon.  However, Berkshire shareholders are faced with the fact that ...
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Over the past five years, Berkshire Hathaway has been a frequent topic on The Rational Walk easily surpassing the coverage of any other company.  In retrospect, there have been many reasons for this lopsided treatment of one company in a universe of thousands of publicly traded businesses.  What motivated this unusual focus on Berkshire Hathaway? Perhaps the most important reason is the clear fact that Berkshire Hathaway is a unique company driven by a very ...
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"The compensation committee relies on its own good judgment in carrying out its duties and does not waste shareholder money on compensation consultants." --Daily Journal Corporation 2013 Proxy Statement David Larcker and Brian Tayan of the Stanford Graduate School of Business recently published a paper entitled Corporate Governance According to Charles T. Munger which concisely outlines the governance philosophy that Mr. Munger has presented on a number of occasions.  While the article will not reveal ...
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The nearly continuous rise in the stock market over the past five years has resulted in tough comparisons for many investors who measure their progress against benchmarks such as the S&P 500.  In a recent article, we pointed out that Berkshire Hathaway is nearly certain to fail the five year retained earnings test not because of poor performance in absolute terms but due to unfavorable comparisons with the S&P 500.  While the implications of failing ...
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To date, we’ve never had a five-year period of underperformance, having managed 43 times to surpass the S&P over such a stretch. ... But the S&P has now had gains in each of the last four years, outpacing us over that period. If the market continues to advance in 2013, our streak of five year wins will end. --Warren Buffett, 2012 annual letter to shareholders One of the basic principles of accountability involves setting objective ...
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"Charlie and I enjoy issuing Berkshire stock about as much as we relish prepping for a colonoscopy." - Warren Buffett, 2009 Berkshire Hathaway annual report Four years have passed since Berkshire Hathaway announced that it would acquire Burlington Northern Santa Fe (BNSF) in a cash and stock transaction.  The acquisition was explicitly meant to be an "all-in wager on the economic future of the United States" according to Berkshire Hathaway Chairman Warren Buffett.  In November ...
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You can argue that if you’re not willing to react with equanimity to a market price decline of 50 percent two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result that you’re going to get. -- Charlie Munger, BBC Interview, October 2009 One of the most common mental errors facing investors is the tendency to anchor on various round numbers.  This tendency has been in ...
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Berkshire Hathaway reported financial results for 2011 over the weekend which included Warren Buffett's annual letter to shareholders.  The most common Berkshire headline on various websites, such as this article by Bloomberg, refers to Berkshire's 30 percent decline in fourth quarter net income.  Given the short attention span and investment horizon on Wall Street, financial journalists understandably seek attention by emphasizing the metric that most readers are looking for.  Unfortunately, net income for a single ...
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The Rational Walk is pleased to make our report on Berkshire Hathaway published in February 2010 available to readers free of charge! The analysis was published shortly after the release of Berkshire Hathaway's 2009 annual report.  Although the analysis is over a year old, the historical background and valuation approach may be useful for readers. On March 1, 2011, The Rational Walk published "Berkshire Hathaway:  In Search of the Buffett Premium". The new report represents ...
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In an article posted earlier today, we provided the video of David Sokol's CNBC appearance along with commentary regarding his statements.  As part of that article, we raised the issue of Mr. Sokol's statements on CNBC contradicting the Lubrizol proxy statement account of the development of the transaction with specific reference to Mr. Sokol's characterization of his discussions with bankers at Citigroup on December 13, 2010.  Specifically, Mr. Sokol suggests that he did not explicitly ...
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David Sokol appeared on CNBC earlier today to discuss his resignation from Berkshire Hathaway which was announced by Warren Buffett in a very unusual press release on Wednesday afternoon.  In an article posted last night, we reconstructed a timeline of the relevant events and argued that regardless of the legal status of his transactions in Lubrizol stock, Mr. Sokol used very poor judgment in the events leading up to Berkshire's offer to acquire Lubrizol.  Nothing ...
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In a press release issued this afternoon, Berkshire Hathaway Chairman and CEO Warren Buffett announced the resignation of David Sokol.  Mr. Sokol served as Chairman of several Berkshire subsidiaries and many observers, including The Rational Walk, previously believed that he was the front runner to eventually assume the CEO position at Berkshire Hathaway.  Mr. Buffett indicated that Mr. Sokol resigned on Monday, March 28 by sending a letter delivered by an assistant.  Mr. Buffett did ...
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