Berkshire 2005!

Warren Buffett had released Berkshire Hathaway's 2005 Annual Report and I have always looked forward to reading his Letters to Shareholders.

Here is some clips from a CBS Marketwatch article , in which Buffett blasts the CEOs for their excessive compensation.

• "Too often executive compensation in the U.S. is ridiculously out of line with performance," said Buffett in his 2005 letter.
• Buffett said the problem lies in the way executive compensation is decided.
  "Huge severance payments, lavish perks and outsized payments for ho-hum performance often occur because comp committees have become slaves to comparative data."
  Buffett said compensation committee members are bombarded with pay statistics and told about new perks that other managers are receiving.
  "In this manner, outlandish 'goodies' are showered upon CEOs simply because of a corporate version of the argument we all use as children: 'But, Mon, all the other kids have one.

And he too had words for them professional money managers.

• "These costs are now being incurred in amounts that will cause shareholders to earn far less than they historically have," said Buffett.
  He added that these fees may cause equity investors to earn "only 80% or so of what they would earn if they just sat still and listened to no one."

And here is commentary from CBS Marketwatch on Berkshire's performance.

• "We estimate our loss from Katrina at $2.5 billion - and her ugly sisters, Rita and Wilma, cost us an additional $.9 billion," said Berkshire Hathaway's Chief Executive Officer Warren Buffett in his annual letter to shareholders.
  The Omaha, Neb.-based holding company reported net income for the fourth quarter of $5.1 billion, or $3,330 a share. Revenue shot up 27% to $25.37 billion.
  For 2005, Berkshire Hathaway posted a 16.6% rise in net profit of $8.5 billion, or $5,538, a share, up from $7.31 billion, or $4,753 a share, last year. Revenue rose 9.6% to $81.6 billion from $74.75 billion in 2004.
  Summing Berkshire Hathaway's performance in 2005, Buffett said it had "a decent year."

Here is some commentary made by Sanjeev Parsad, who runs Berkshire Hathaway Shareholders's message board at MSN. ( click here )

Here is an article posted on the Missourian.com.

click on the above to see the timeline of Warren Buffett's weath!

• But the fact is that if the markets were so efficient, there would be no Buffett. He has made his fortune on others’ missteps. While the S&P 500 Index gained an average annual return of 10.3 percent between 1965 and 2005, Berkshire Hathaway gained 21.5 percent. While others invested in profitless, paper Internet companies, Buffett invested in Banalville. He bought companies such as Benjamin Moore Paint and Justin Industries, a brick and Western-style boots manufacturer.
• Buffett’s time-tested belief: Investors don’t always act rationally, the market isn’t always efficient and bargains can be made. Competing with Efficient Market theorists, he says, is like playing bridge against opponents who were taught it does no good to look at the cards.
  

(hmm... from that article, I see that there is a Buffett Blog )

Here are more news links... Associated Press , reuters , bloomberg news