Berkshire Hathaway’s Mark-To-Myth Accounting Practices

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PictureWarren Buffett, Penn, 1948

Say it ain’t so, but has the much-admired Berkshire Hathaway engaged in financial shenanigans? If so, many will be crestfallen.

Apparently, instead of adhering to accepted SEC guidelines concerning marking down long term assets to their objective market values, Buffett’s Berkshire Hathaway decided to mark its assets to wishes, not unlike some other notorious institutions including Enron and zombie banks (not all banks, of course). 

Accordingly, here are two articles by the irreverent Zero Hedge highlighting the aforementioned Generally Unaccepted Accounting Principles (GUAP):

Berkshire Takes Accounting Rules Into Its Own Hands, Tells SEC To Stuff It

A new just released stunner discloses the unprecedented level of hypocrisy attained by Warren Buffett, for whom apparently accounting rules are swell, except when he actually needs to follow them.

Full Text Of Berkshire Letter Deciding To Override SEC Accounting Policies

“We eagerly await Ms. Becky Quick’s reporting on this latest development.”

And, here is an article by Michael Lewis titled “The Temptation of St. Warren” that was published in the New Republic magazine (circa February 1992).

As one commenter stated, quite harshly and disrespectfully in our opinion, “Buffett was a crook as a youth; is he now being revealed as a crook at the end of his career, too?”  Nevertheless, regardless of one’s perspective, that kind of rhetoric is crossing the line of civilized discourse.


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5 thoughts on “Berkshire Hathaway’s Mark-To-Myth Accounting Practices”

  1. Is that a fur coat, cigar and top hat? I guess he learned – well after college days – that people will be less critical and even like him if he plays the ‘aw shucks, country boy shtick.’

  2. does he base his summary of annualized returns on cost versus actual value of these securities? If so doesn’t that overstate the performance of managers who are actually under performing? This sounds shady at best

  3. Berkshire’s argument that it should be permitted to mark its public stock holdings at mythical valuations versus the actual market prices is cringe-worthy.
    Wouldn’t Berkshire be insolvent without the direct and indirect government bailouts to its portfolio companies and related entities? The fact that public official permit this is utterly sad.
    https://finance.yahoo.com/news/Buffetts-firm-defends-apf-2169409035.html?x=0&sec=topStories&pos=main&asset=&ccode=

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    Great piece of writing, I really liked the way you highlighted some really important and significant points. Thanks so much, I appreciate your work.

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