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Smart Way to Think of Govt Debt
Reuters reports that in the US:
“Short-term government borrowing rates are cranking towards the 6% mark for the first time in history – not far off the rate you’d expect to pay on a 30-year mortgage, with all the risk that this would entail.”
Berkshire Hathaway – Strong Result
There are a handful of larger companies, and there are older companies, but there are few companies that have been around as long as Berkshire that have compounded as consistently. In this sense the stock is at least a reasonable proxy for a diversified exposure to relatively conventional US stocks.
Earnings Recap
Berkshire Hathaway’s most recent quarterly release beat analyst estimates on both the top and bottom lines, with metrics such as:
- $85.93 billion in revenue, up 21% year-over-year,
- $8.065 billion in operating earnings, up 12%,
- $35.7 billion in net income,
- $16.25 in GAAP EPS,
These earnings metrics were all well ahead of average. GAAP EPS, in particular, was 364% ahead of analyst estimates. It’s possible that some analysts have taken Buffett’s words to heart, and are using operating earnings as their “EPS” metric. If that’s the case then, with 2.184 billion ‘B’ shares outstanding, EPS was $3.69, which was also ahead of the $3.50 estimate. Especially noteworthy in the release was $4.4 billion worth of buybacks, which helped propel EPS slightly higher, and showed management’s commitment to returning value to shareholders.
Not only did all relevant metrics beat analyst expectations, but underwriting earnings rose from $167 million to $911 million largely through turnaround of the auto insurance business .
Eye2theLongRun 