Clayton Homes: An Admirable Track Record

At a time when the newspapers are full of stories about predatory lenders, irresponsible homeowners, and the terrible impact of foreclosures on the national economy, it is refreshing to read about a home builder that largely avoided the housing meltdown. The qualities of Clayton Homes and its customers can serve as a case study demonstrating the positive outcomes that occur when all parties to a transaction attempt to operate with a sense of accountability and ethical standards.

Pensions and Tax-Exempt Bond Insurance

The steep market declines over the past year have left many state and local governments struggling with severely underfunded pension plans. The Wall Street Journal reported today that several states and municipalities are considering extreme measures to address pension shortfalls. This also has implications for municipal bond insurance, including the business Berkshire Hathaway entered in early 2008.

Berkshire’s Misunderstood Derivatives

With all of the inaccurate information being reported about Berkshire’s derivatives exposure, Warren Buffett apparently saw the need to devote several pages of his annual letter to shareholders to explain the situation in great detail. Unfortunately, it appears that most articles on Berkshire’s 2008 results either did not report on the contents of Buffett’s letter or continued to provide misleading or inaccurate information. Perhaps the reporters covering Berkshire are simply confused. This post attempts to shed some light on the situation.

Berkshire Intrinsic Value Estimate: $142K

This is the fifth and final installment of a multi-part series covering the Berkshire Hathaway 2008 Annual Report and Warren Buffett’s letter to shareholders. In this post, I will consolidate the valuation estimates from the prior posts in the series and come up with an estimated intrinsic value for Berkshire Hathaway at December 31, 2008. I will also briefly examine the events of Q1 2009 and determine what impact these events might have on Berkshire’s intrisic value as of the end of February.


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