Buffett reports honest over earnings

Billionaire investor Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc.

TEXT OF STORY

Renita Jablonski: He's considered one of the most astute investors in the world.
But stock in Warren Buffett's company, Berkshire-Hathaway, is down 20 percent for the year -- 50 percent from its high in December 2007. The company releases earnings today. Tomorrow, Buffett releases his annual letter to shareholders. Rico Gagliano looks at expectations for both Buffett's company and his reputation.


Rico Gagliano: Some call him "The Wizard of Omaha." But Berkshire-Hathaway's earnings announcement could be a peek behind the curtain at the mere mortal named Warren Buffett.

Michael Yoshikami: I expect it's going to be a pretty dismal report.

That's Michael Yoshikami, President of YCM-net advisors. Like most analysts, he predicts big losses. The result of the bad economy and what some say were Buffett's bad investments.

Yoshikami: There's two issues that he's being criticized. One is of the capital value of assets he invests in, such as Bank of America stock. And then the second criticism is derivative bets.

Buffett's "deriviative bets" are that the S&P 500 will rise. He lost at least $2 billion bucks on those bets last year. Still, Berkshire-Hathaway stock has a five-star rating from Morningstar. And Yoshikami says Buffett's no-holds-barred shareholder letters still command respect.

Yoshikami: They are really an admission of really what worked and what didn't work. And I think that candor is something that's so much lacking that we're actually sitting here waiting for the one corporate news release that we maybe actually can trust.

In Los Angeles, I'm Rico Gagliano for Marketplace.

About the author

Rico Gagliano is the host of Dinner Party Download.

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