Winnipeg Free Press - PRINT EDITION

Buffett's firm fails to top S&P's growth

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NEW YORK -- Warren Buffett probably missed his target for the first time in 44 years.

Berkshire Hathaway, his $292-billion company, is poised to report it failed to increase net worth more rapidly than the Standard & Poor's 500 Index during the past five years, analyst estimates show. It would be the first time the billionaire investor fell short of the goal since he took over the Omaha, Neb.,-based company in 1965.

Buffett, 83, highlights the comparison as a way for shareholders to evaluate his performance against a low-cost fund that tracks the index. The S&P 500 returned 128 per cent including dividends since the end of 2008, fuelled by the Federal Reserve's stimulus efforts and higher corporate profits. Berkshire's book value per Class A share, Buffett's yardstick, rose 80 per cent to $126,766 starting at the same point until Sept. 30, the latest data available.

"He's been awfully honest" by keeping the goal the same, said Tom Russo, a partner at Berkshire investor Gardner Russo & Gardner. "He didn't pick it because it was an easy benchmark."

Analyst estimates show Buffett probably didn't narrow the gulf much in the final three months of 2013. Barclays Plc predicts Berkshire's book value rose to $131,005 a share, or 86 per cent more than it was five years earlier. Keefe, Bruyette & Woods estimates an 83 per cent gain.

-- Bloomberg News

Republished from the Winnipeg Free Press print edition January 3, 2014 B11

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