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Non-Tech : Berkshire Hathaway Class B
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To: Benkea who wrote (931)8/14/1999 12:10:00 AM
From: Michael & B.Anne  Read Replies (1) of 1652
 
re: quarterly report

People and the media will misunderstand this report
(they will look at earnings and ignore revenues - and the
stock will be hit.)

Reveunues were very nicely up !! - but earnings were down
'cause

a) Geico is in tough environment (good for us if margins
are shrinking since our business model has less overhead)
And BRK is spending money to increase market share -- a
good idea - especially now before other insurers move
more toward removing the middlemen.

b) GRN is costing money. I am not sure whether this was
poor sales policies that led to higher risks or lack of
reserves in desire to make then stock holders happy. But
that is not WEB style: he wants bad news out early and he
only wants to write "within the odds" insurance.

c) special accounting charges -- goodwill charges. Having
everything to do with GAAP and nothing to do with actual
earnings and loses.

a, b, and c, above account for around $225 per B share -
or if absent would have yielded $600 per B share.

But again, pundits (yech) will read once, look at earnings
per share - ignore revenues and realignment efforts and
write "we told you so." Sigh

Finally all that said, GenRe (near term) has been horrid
.. but for everything turn, turn.

my opinions

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