Bloomberg News Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., changed the standard by which he measures performance after falling short of his target for the first time in decades.
A gauge of Berkshire’s net worth failed to rise as much as the Standard & Poor’s 500 Index in the five years ended 2013, Berkshire’s annual report showed today. It was the first time that happened since he took control of the company in 1965. Still, Mr. Buffett said that he and Vice Chairman Charles Munger can beat the index over stock cycles, like they did in the six-year period that ended Dec. 31.
“Through full cycles in future years, we expect to do that again,” Mr. Buffett wrote in the report. “If we fail to do so, we will not have earned our pay.”
Mr. Buffett, 83, has long criticized other companies for altering how they evaluate their performance when such changes make managers’ efforts look better. Even as he predicted that Omaha, Neb., Berkshire would fall short of its goal last year, he wrote that he and Munger wouldn’t “change yardsticks.”
Book value, the measure of assets minus liabilities that Mr. Buffett highlights, rose to $134,973 a share at the end of December, 91% more than where it stood five years earlier. The S&P 500 returned about 128% during that period, including dividends, as stocks rallied from their f
No comments:
Post a Comment