No. of Recommendations: 24
Berkshire's operating earnings have compounded at 17.3% since 2018;
Huh?
Railroad net earnings up 0.69%/year in those seven years.
Utilities net earnings up 6.15%/year
Manufacturing/service/retail/non-controlled up 6.15/year
Sum of the above divisions up 4.87%/year
Underwriting had a good year, up 24.5%/year since 2018, but it's so volatile that it shouldn't be included in any rate-of-growth calculation that uses a single baseline date.
If I replace actual underwriting earnings with a cyclically adjusted figure which was up 5.86%/year, the sum of the 3 items above plus net underwriting profit was up 4.94%/year in full year 2025 compared to full year 2018. Before inflation adjustment.
Those figures use FY 2025 instead of the four quarters to Q1 as the endpoint, but it doesn't change the observation that the statement above is spectacularly silly.
In fact, I figure that the extremely weak rate of growth of operating earnings is the major weakness at Berkshire these days, and the major reason not to be too keen on buybacks as a way to deploy capital. Though there are reasons for the weakness, some of which are arguably transient, the message from the top level numbers is that it would constitute spending money to buy more and more of a set of ho-hum businesses.
Jim
