Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are the eight most fascinating ones I read this week.

1. How Warren Buffett thinks about cash
The Globe and Mail has a great piece with Buffett biographer Alice Schroeder discussing why Berkshire Hathaway (BRK.B -0.39%) holds so much cash, even with interest rates at 0%:

Ms. Schroeder argues that to Mr. Buffett, cash is not just an asset class that is returning next to nothing. It is a call option that can be priced. When he thinks that option is cheap, relative to the ability of cash to buy assets, he is willing to put up with super-low interest rates, said Ms. Schroeder, who followed Mr. Buffett for years before she became his biographer.

"He thinks of cash differently than conventional investors," Ms. Schroeder says. "This is one of the most important things I learned from him: the optionality of cash. He thinks of cash as a call option with no expiration date, an option on every asset class, with no strike price."

2. Better off than four years ago
The blog A Dash of Insight gives a simple explanation for stocks being at multiyear highs:

May of 2008. Forward earnings on the S&P 500 then were 93.77, the 10-year yield was 3.9% and the odds of a recession -- according to the best method -- were nearly 100%.

Now. Forward earnings are 108, the 10-year yield is 1.59% and the recession odds for the next year are below 10%.

People talk about headlines and sling around phrases like Draghi put, printing money, etc., instead of analyzing data. The world is a much better place for investing than it was in 2008.

3. Fun while it lasted
Growth in health care costs slowed in recent years to the lowest level in half a century. Some (including me) hoped that was a sign the multi-decade surge in health costs was catching up with itself. That may have been wishful thinking, as Sarah Kliff writes in The Washington Post: "U.S. spending on health insurance grew at an accelerated rate in 2011, breaking a two-year trend of smaller cost increases. The culprit, a new study suggests, is not Americans seeking more treatment but rather rapid growth in the price of medical care."

4. Booming by comparison
The finance blog Calculated Risk shows our employment recovery compared with other major economies after financial crises (click here for larger image):

5. Polarized
Gallup runs a poll asking people how confident they are in the U.S. economy. With participants separated by by political affiliation, see if you can spot the pattern:

Source: Gallup. Graphic recreated.

6. Too big to innovate
Harvard Business Review has a must-read piece on why big businesses don't innovate as well as small ones:

Once a business figures out how to solve its customers' problems, organizational structures and processes emerge to guide the company toward efficient operation. Seasoned managers steer their employees from pursuing the art of discovery and toward engaging in the science of delivery. Employees are taught to seek efficiencies, leverage existing assets and distribution channels, and listen to (and appease) their best customers.

Such practices and policies ensure that executives can deliver meaningful earnings to the street and placate shareholders. But they also minimize the types and scale of innovation that can be pursued successfully within an organization. No company ever created a transformational growth product by asking: "How can we do what we're already doing, a tiny bit better and a tiny bit cheaper?"

7. Now you see it...
David Reilly in The Wall Street Journal gave a good example of how opaque bank balance sheets can be:

At $2.3 trillion, J.P. Morgan's assets as shown on its balance sheet are 12 times its equity. But if all its derivative assets are included, the bank's assets would swell to about $4 trillion and its leverage rises to about 18 times. ... [Bank of America (BAC -1.49%) and Citigroup (C -1.21%)] would show leverage of about 15 times if all derivatives are included, versus around 10 times on the [current accounting] method.

8. Bulls on parade
Reuters blogger Felix Salmon demonstrates why Apple (AAPL -0.04%) isn't a bubble at $700 a share with a neat graphical comparison to Microsoft's (MSFT -3.67%) rise a decade ago:

Enjoy your weekend.