I've been reading "The Tower of Babel: The Evidence Against the New Creationism" by Robert T. Pennock.  It's an extremely interesting read and provides a comprehensive case against a literalist interpretation of the Book of Genesis that is used as the basis for modern creationist theory.  The book was written as a plea to give serious thought to the implications of teaching creationism in our public and private school systems.  While it probably won't change your thinking on this polar issue, it will convince you that the adoption of creationism as an equally valid theory to evolution has significant consequences to all branches of scientific study from biology and physics to linguistics and psychology.  Definitely worth a look if you're interested in the issue.
10:23:50 PM  #  

Posting this from inside FMRadioStation.  I like it, but I'm not seeing how it provides me with anything above and beyond Radio's current capabilities.  I do like the nested news aggregator format more than Radio's aggregator, but probably not enough to pay for it.  Well, I'll see if this post works and continue using it for a few more days to get a better feel for it.  I do like the spell checker and the editor features quite a bit, tho, too.
4:15:25 PM  #  

I'm getting ready to try out FMRadioStation.  Looks interesting.
4:01:41 PM  #  

First thoughts on going through the 2002 Annual Report from Berkshire Hathaway:

• Record profits were achieved last year, mostly from the hard insurance markets.  GEICO has been moving in the background to get set up for this market for the last couple of years and now that it is here they are taking full advantage of it.  I have a feeling that they are going to have another banner year this year as people continue the "flight to quality" that's been going on in the insurance markets for the last year.  At first glance it looks like their combined ratio or "cost of float" as Buffett calls it is on the low end of the industry, which is good.  In addition, there premium volume has risen significantly.  Book value at this company has grown at about 7%-8% compounded for the last 5 years.  If you compare that to its competitors or even the market as a whole this is pretty astounding.
• BerkshireRe, led by Ajit Jain, is continuing to grow at an extremely impressive rate.  I am so in awe of this man and his job...and his incredible track record.  With the recent upheaval in the reinsurance world, and the incredible number of reinsurers who are in runoff and winding down business, Berkshire stands poised as a solid anchor of financial strength in these uncertain years.  They were one of the few reinsurance companies not downgraded after the events of 2001 and if they can survive the "perfect storm" of Enron, WorldCom, KMart, GlobalCrossing, 9/11, and Hurricane Alley of that year they are insulated enough from most foreseeable calamities.  Still, as Buffett is fond of saying, "there are no pleasant surprises in the insurance industry."
• GeneralRe is still a drag on the company and it looks like Buffett and Munger may have regretted this purchase more than a few times over the last couple of years, especially reading their sidenotes on the derivatives industry and how it affects GenRe.  Still, they continue to remain optimistic of the fact that they have "turned the corner" on GenRe.  If they have, the combined financial power of GenRe and BerkshireRe will most likely become the dominant force in the reinsurance industry in the coming years.
• Acquisitions of Pampered Chef, Fruit of the Loom, and Garan represent more significant investment in retail sectors (primarily clothing).  Fruit of the Loom seemed a surprising choice of acquisitions seeing as how Berkshire rescued it out of bankruptcy.  It has significant brand name recognition, but that means little in the mens and boys undergarment industry.  However, when I found out that it was a onetime purchase of Ben Graham's (Buffett's teacher/mentor) it made more sense.  Garan is a solid company with a solid earnings history and was acquired at a fair price.
• Acquisitions of several significant energy and oil pipelines that were acquired from the fallout of Enron/Dynegy/El Paso/Williams Co.  Buffett is extremely interested in the energy sector lately since it has taken a serious hit from the California price fixing scandals and the Enron debacle.  Unfortunately for the lay investor, there isn't much we can do but sit on the sidelines and watch as he scoops up assets for cheap prices since the energy companies themselves (with a few exceptions) are still overpriced buys with catastrophic levels of debt and derivative trading departments that have piled blue sky on top of ether to achieve earnings that even now look dismal.  It is interesting and telling to note that Berkshire has avoided investing in any energy companies in sizeable amounts, prefering to pick their carcasses at fire sales.
• Indeed, Buffett and Munger claim stock valuations are still too high for their liking.  I think this is generally true, but I also think that it is important to bear in mind that they are limited to investing in large cap companies now since small caps won't make much of a dent in their earnings stream or capital base.

All in all, good times are ahead for the BH shareholders!  I'll probably post more as I go through the financials in greater detail.  Feel free to sound off with comments and criticisms in the days ahead.

1:16:14 PM  #