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To: shrinkermd

"GE has about the same capitalization but earns twice as much as Berkshire."

First of all, GE has about 3 times the market capitalization of Berkshire Hathaway so what you said is blatantly untrue. Secondly, the author of this article totally ignores the fact that Berkshire Hathaway is for the most part an Insurance company, and that business always gets less ROE, its just the way the business is structured. Buffett is idolized not because he is rich, but because of his modesty, honesty, and his beleif that if you are right, and you stick to your guns, you will come out ahead in the end.


18 posted on 12/25/2004 11:09:44 PM PST by Betaille (Harry Potter is a Right-Winger)
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To: Betaille
"First of all, GE has about 3 times the market capitalization of Berkshire Hathaway so what you said is blatantly untrue. Secondly, the author of this article totally ignores the fact that Berkshire Hathaway is for the most part an Insurance company, and that business always gets less ROE, its just the way the business is structured. Buffett is idolized not because he is rich, but because of his modesty, honesty, and his beleif that if you are right, and you stick to your guns, you will come out ahead in the end. I probably should have used "shareholder equity" rather than "capitalization." In any case, the only thing I know is what is written in Barron's which is:

"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.

21 posted on 12/26/2004 5:59:43 AM PST by shrinkermd
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