It seems the Oracle Of Omaha is invincible – whacking all his critics one by one over the time. When Warren refused to expose a single cent in any of the technology stock or company during the dot-com boom, he was ridiculed and called all sort of names. History has shown he was right after all.
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earnings from insurance
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earnings from investing the huge amount of insurance’s cash profit
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earnings from non-insurance arm
Warren’s Berkshire Hathaway’s lifeblood of earnings can be seen in the insurance sector. For example:
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in 2004 the pre-tax profit was $ 387 million.
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in 2005 when the Katrina made the headline, the insurance business turned 360 degrees to record a loss of $ 897 million.
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in 2006, the earlier loss made the same 360 degrees change for a $ 2.5 billion profit
That’s the risk or excitement in insurance business, either you’ll make it big or sunk big time. Nevertheless it’s a known fact that the biggest problem with Berkshire which kept Warren’s head spinning is the huge war-chest it has. Though with numerous multi-billion acquisition, Berkshire still has $ 42 billion in cash and cash-equivalents for its’ shopping spree. It’s simply too difficult to find more good companies to buy and apply the same growth rate on the billion notes.
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Warren’s baby, Berkshire Hathaway (BRK.A) hit the $ 100,000 per-share mark days ago – the highest share price ever recorded. The A-Shares are up more than 5,500 times since 1965 when Warren Buffett bought over the textile company.
November 28th, 2006 by financetwitter
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