Berkshire Hathaway Stock Nose Dives

Apr 30 2011           Jump To Discussion

NEW YORK – Warren Buffet, CEO of Berkshire Hathaway has been hit hard by Japan’s Tsunami disaster.

The world’s third richest man’s assured stock took a major nose dive.  Berkshire Hathaway, a conglomerate company headquartered in Omaha Nebraska, USA, has been reporting an annual book value growth of 20.3 percent for the past 44 years.

Its shareholders have enjoyed a major profit return on investment as high as 76 percent.  But all that seems to have come to an end set on by Japan’s Tsunami disaster.

The company normally reports a quarterly profit of 3.6 billion dollars.  This quarter however, the profits dropped to only 1.5 billion, a loss of about 42 percent.

According to the company, 1.1 billion dollars alone were lost as a direct result of the environmental disaster unfolding in Japan; especially the insurance division of the company was hit hard by the catastrophe.

The remaining 600 million dollars were lost for the most part because of natural disasters that have occurred in the Pacific rim, particularly the massive earthquake in New Zealand and the large scale flooding  in Australia.

Buffet made the company’s profit/loss figures for the first quarter of 2011 available before conducting the traditional stockholders spring meeting at the headquarters in Omaha.

Warren Buffet took control of Berkshire Hathaway in 1964 and grew the company to a staggering value where class A shares sold for $99,200 as of December 31, 2009, making them the highest-priced shares on the New York Stock Exchange .

Berkshire now owns a diverse range of businesses including railroads, confectionery, retail, home furnishings, encyclopedias, manufacture of vacuum cleaners, jewelry sales; newspaper publishing; manufacture and distribution of uniforms; as well as several regional electric and gas utilities.

Whether the recent tornadoes devastating 8 states in the United States will continue to force a downward trend for Berkshire remains to be seen, although some experts predict the trend will likely continue.

 

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