Warren Buffett shared some bad news to shareholders of Berkshire Hathaway Inc. in a letter recently: the company’s book value rose 14.4 percent in 2012, but that was a “subpar” increase.
If you’re wondering why making a $24.1 billion net gain can be deemed a failure for Buffett, it’s because the S&P (Standard & Poor’s) 500 gained a 16 percent increase in 2012. As he notes, this is the ninth time in 48 years that Berkshire’s percentage increase was less than the S&P’s.
“When the partnership I ran took control of Berkshire in 1965, I could never have dreamed that a year in which we had a gain of $24.1 billion would be subpar … But subpar it was,” Buffett writes according to CNBC.
Buffett’s company’s net earnings were $4.55 billion in the quarter, up from last year’s Q4 earnings of $3.05 billion. In 2013, he says he wants to make a major acquisition and see if he can develop opportunities by buying local newspapers. He also criticizes “hand-wringing” from CEOs who “cried ‘uncertainty’ when faced with capital-allocation decisions.”
“It’s back to work; [partner] Charlie [Munger] and I have again donned our safari outfits and resumed our search,” Buffett writes. We will keep our foot to the floor and will almost certainly set still another record for capital expenditures in 2013. Opportunities abound in America.”