No. of Recommendations: 9
Yes. The reason, I think, was a step change in the growth rate of Berkshire's equity portfolio, not the growth rate of earnings.
It seems to be mainly due to the complete restructuring of the firm, and the investment portfolio, as a result of the Gen Re acquisition. In the portfolio, it was a huge switch from an equity emphasis towards bonds. From end-1997 to end-1998, equities as a percent of book fell from 115% to 69%, (even though equities were up in absolute terms), primarily due to the ocean of bonds that came with Gen Re.
It's easy to forget how transformative that deal was. Total assets rose by a factor of 2.18
Jim
