Wednesday, July 2, 2008

Buffett's Berkshire Has Worst First Half Since 1990

Warren Buffett's Berkshire Hathaway Inc. has slumped almost 20% since December. The decline exceeds the drop of the Standard & Poor's 500 Index, which is down 15%.

Buffett holds significant positions in banking stocks that are down substantially. As of the end of March, Wells Fargo & Co., American Express Co. and U.S. Bancorp, were three of the Berkshire's 10 biggest equity holdings.

Margins are declining in the insurance industry where Berkshiire also has major holdings. "That party is over," Buffett wrote in his annual letter to shareholders in February. "It is a certainty that insurance industry profit margins, including ours, will fall significantly in 2008."

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