Miss nothing of the Q&A with Warren Buffett & Charlie Munger from the Berkshire Hathaway Annual Meeting 2018, with this edit – we removed only the fluff in between!
Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid?
Q&A With Buffett & Munger Berkshire Hathaway Annual Meeting 2018
Transcript
I'm Warren he's Charlie. Charlie does most things better than I do. But this was a little tough so maybe you can chew on that a while. OK. This morning we posted both our earnings and our Tengku and if we can put up on slide one you can take a look at what was reported and as I warned you in the annual report a new accounting rule was introduced at the beginning of this year and it provides that our equity securities whether we sell them or not are mark to market every day so we can have a gain or loss of a couple of billion dollars in ours. Equity securities portfolio and that day according to the accounting principles now in effect which are changed will be recorded as making a couple billion dollars a they are losing a couple of billion. And I told you that would produce some very unusual effects from quarter to quarter and it further explains why I like to release our earnings early Saturday morning and as well as the 10 queued to give people a chance to read through the explanation because if you just were handed this with a TV monitor you know 330 in the afternoon or whatever it might be you would report the net earnings figure Utterson understandably very quickly and and it really is not representative of what's going on in the business at all. So if you look at the figure of operating earnings which is what we look at we actually earned a record amount for any quarter we've ever had. And that includes no realized gains or losses on on securities or on the few remaining derivatives we have.
We might leave that slide up there just a little longer maybe this helps the insurance underwriting Geico had quite a good sized turnaround in profitability and a good gain although not as big again as last year which was a record in terms of policies in force and really throughout most of our businesses and the details around the 10 cube which is up on the on our website. Now as you can see and the railroad was up significantly and we had most of our businesses tended to be out. Now we were aided in that in a material way by the reduction in the federal income tax rate from 35 percent to 21 percent. Our businesses were up significantly on a pre-tax basis but but the game was further enhanced by the by the change in the income tax rate. So that does that pretty well sums up the first quarter we'll probably get some may well get some questions on it when we get into the question and answer section the questions will be getting we've got the press over here and we have the analysts on my left. And of course we have our partners out in front of me and we will rotate among you and the questions we get as we go through the next six hours or so. We'll understandably relate to a lot of current events. You know you will. We may get asked and we don't know the questions but we may get asked about that policy or whether we're seeing any inflation or where the business is speeding up or down or or the threats we may face competitively in our businesses as we go along.
And anything goes on the questions except we won't tell you what we're buying or selling but it really can be a question sometimes of confusing for.
