The period from 1997 to 2001 was a roller-coaster ride for Berkshire Hathaway or, rather, the stock markets globally. The dot-com bubble built up in the late 1990s and then burst in 2000. Berkshire did not see massive rallies or declines because it did not have any technology stocks.
The US witnessed a major terrorist attack in 2001. As an insurance company, 9/11 was a big blow to Berkshire Hathaway. The impact was amplified because it had recently acquired General Re, a global reinsurance behemoth.
In this episode covering Warren Buffett’s letters from 1997 to 2001, we also discover some quirky facts about Berkshire Hathaway. For the amount of taxes it paid, Berkshire was shouldering more than half a day’s functioning of the US government. And the Berkshire HQ had only 13.8 employees. Wait, what?
00:00 Introduction
01:14 Buffett’s alternative investments
03:28 Started publishing letters online
03:51 Catastrophe bonds
07:28 Low interest rates and high earnings prospects
08:19 Regret about selling McDonald’s
08:53 Berkshire’s huge tax bill
10:11 Acquisition of General Re
12:16 Acquisition of NetJets
14:33 GEICO’s massive ad spends
17:48 The Tale of RC Willey
19:58 Cash acquisition vs stock acquisition
21:19 Dexter Shoe was a mistake
23:00 Worst performance ever in 1999
25:00 Outperformance over S&P 500
26:04 Acquired eight companies in 2000
26:16 Bekrshire’s 13.8 employees
27:35 The 9/11 impact
30:24 Is it an AGM or a fest?
34:01 Summary
Previous Episodes:
Episode 1: • Ep. 1 - Investment Phi...
Episode 2: • Ep. 2 | How Warren and...
Episode 3: • Ep. 3 | Warren and Cha...
Episode 4: • Ep. 4 | Buffett's view...
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