Posted on 12/25/2004 7:17:26 PM PST by shrinkermd
"GE and Berkshire Hathaway have nearly equal shareholder equity levels, approximately $80 billion each, as of the end of 2003. But while Berkshire showed a profit of $8 billion for 2003, GE's profit for the same period was a whopping $15.5 billion, nearly double Berkshire's. During the past seven years, aGE has produced an average ROE of 23.9%, dwarfing Berkshire's 5.4%. In addition, GE pays a dividend of between 40% and 50% of the company's profits. Payment of a dividend has the effect of slowing GE's increase in book value, yet GE's book value per share has still grown nearly 20% faster than Berkshire's over the past seven year.
It surely seems GE is a better managed company than Berkshire.
GE gets a high return on equity because they are absolutely swimming in debt. Anybody can increase their return on equity by taking on more debt than they have market cap(as GE has done). However, the part about dividends makes a good point. If Buffett isn't producing with the equity that he's reinvesting, he should distribute it to us as a dividend. He has said he would do so when the time came that he could no longer get a higher return than Berkshires individual shareholders could. Unless he has something really big up his sleeve, I think that time has come.
What company in the US has been better managed than GE ?
Buffet has done very well by his shareholders. Maybe not the best, but very well.
I think this is a true statement. First, if you want to have the greatest chance to be financially successful in the last 100 years, you should be born in the US, white is better than black, hispanic or asian, and male is better than woman.
Winning the ovary lottery is not all that is required for success, but tell me where the above statement is wrong.
I'm with you. Buffet's best days passed long ago. He has more cash than Gates, but Bill keeps finding new markets... not so anti-republican Buffet.
It's wrong because it precludes character from the discussion.
This is what MLK was trying to say.
It's why no great boxer ever came from a middle-class household. It's why overcoming adversity is such a common thread in the success stories of so many Americans.
Buffet would have you believe that its luck, and the field must be leveled for the unlucky. It's why Condoleeza Rice will always be the first black and female National Security Advisor and first female Secretary of State, instead of simply being the best qualified person who had the confidence of the President at the time.
George Washington Carver will always be a great black inventor, instead of a simply a great inventor.
Character is the gene of success, not skin color or race.
The reason why so many young doctors have Indian or Asian names is because their parents emphasize character above socialization.
If you don't have a wolf at your door, then get one.
Buffet's company is based on insurance company earnings. One of their best, and most profitable, lines is selling huge policies to pay inheritance taxes. Imagine if President Bush is successful in killing the "death tax" what will happen to the insurance industry. IMHO, if he does not die soon and changes in our tax structure come to fruition he will have to accept being kicked upstairs, pay a dividend and do something besides currency trading to protect his assets.
Buffet will pay a dividend when snowballs are thrown by lifes ultimate losers in a place to hot to handle. What once seemed so good has turned into a sewer. Ask the Magic Chef people if they are glad Buffet bought them out.
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