Analysts have urged Warren Buffet to make the financial reports of Berkshire Hathaway more thorough, arguing that they currently offer too little information for a company of its size.
The super-investor's $370bn multinational organisation is a holding company, made up of subsidiary businesses ranging from the insurance sector to retail and manufacturing. Among others, it owns BNSF railway, Dairy Queen and FlightSafety International.
The FT interviewed five of Berkshire's six analysts, and discovered that they all found it difficult to carry out financial modelling with the amount of information they are given by Berkshire.
Jim Shanahan of Edward Jones described it as “terrible . . . It is laughable that you could model this company in the same way as you could any other financial company”.
Buffet said the criticism was not fair. He told the FT that all “relevant factors” related to long-term investment are provided by the reports.
For him, analyst recommendations have never been important in determining investment decisions, an opinion reflected in the low number of analysts employed by Berkshire compared to many similar-sized businesses.
“We don’t want anyone buying Berkshire on the basis of an analyst report. We don’t want anyone who has earnings expectations for the next quarter,” he said.
For Buffet, it is more important to convey the message about the company's performance directly to shareholders, which he does via an annual letter. The next is due to be sent on 28 February.
“I have just written 20,000 words in an attempt to make sure our million shareholders are as well informed as possible and have the information I would want if I were in their position,” he said.