Buffett Takes Blame for Poor Results

May 1, 2000

Warren Buffett told shareholders over the weekend that he is solely to blame for the poor performance of Berkshire Hathaway over the last year.

Berkshire’s 1999 earnings dropped 42 percent from $2.8 billion the previous year to $1.6 billion. And the company’s stock, the most expensive listed on the New York Stock Exchange, fell 20 percent last year.

A major stumbling block was General Re Corp.’s huge payouts on claims from natural disasters, resulting in $897 million in underwriting losses for the year. Also, the company’s direct auto underwriter, GEICO, saw profits fall and is expecting 2000 results to also be weak. However, Buffett believes GEICO’s massive advertising campaign is beginning to pay off.

Buffett said General Re will raise its rates. Barring huge catastrophes, the underwriter’s losses should fall in 2000, though Buffett warned General Re will most likely see another unsatisfactory year.

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