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Berkshire Hathaway
Going Back to Look Forward

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By jtayan
November 16, 2007

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If one went back 7 years to the year 2000 in November, it would be interesting to look ahead at Berkshire's future. The book value was about 40,000 at that time.

The biggest holding in the stock portfolio was Coke. It would have been nice to know that it would only increase in value from 55 to 60 over 7 years. And the big four would only go up by about 35%.

It would have been helpful to predict big losses in terrorist attacks and hurricanes in the upcoming few years.

It would have been helpful to predict that the markets would remain strong enough to prevent Berkshire from investing large proportions of its cash flow and cash would build up. It would also have been useful to know that interest rates would be around 1% during a good portion of the time so the returns on that built up cash would be minimal.

But it would be most advantageous to know that the master could double book value during that 7 year period anyway.