Buffett takes blame for losses

0 Comments | Sunday Herald, The, Apr 30, 2000 | by Darran Gardner

Warren Buffett told shareholders in Berkshire Hathaway yesterday that his company has had its worst year ever - and that he blames himself for the poor performance.

The annual meeting attracted 12,000 investors and followers of Buffett, one of the world's richest men, who has made the gatherings a circus-like event.

At the meeting, companies in which Berkshire has holdings, including Dairy Queen and Coca-Cola, lay out their wares. Stockholders, some of whom have come to the event every year for decades to meet old friends and listen to Buffett crack jokes and talk about investment strategies.

But the "Oracle of Omaha" said that 1999 was the company's worst in its 35-year history. And, said Buffett, "even Inspector Clouseau could find last year's guilty party - your chairman".

Bob Soener of Omaha, a longtime shareholder and retired stockbroker, said Buffett's investments helped him put seven children through private school and believes the chairman will come back fighting.

Berkshire's earnings dropped 42% in 1999 to $1.6 billion (around #1bn) from $2.8bn (#1.76bn) the year before while his stock fell 20%. Berkshire's main business - insurance - struggled particularly because of its losses in General Re Corp, one of the largest reinsurers in the world. Huge payouts on claims from earthquakes and storms contributed to an $897m (#564m) underwriting loss.

Buffett warned stockholders that his company will not outperform the stockmarket as dramatically as it has in the past. Prices are higher for businesses and stocks, he said, and Berkshire is so huge that if it makes a new investment, it would have to be among a small number of big businesses to have any major impact on the company's fortunes.