Right now, Warren Buffett’s holding company Berkshire Hathaway pumps out about $12 billion per year in annual profit. Because it owns extensive insurance operations that experience fluctuating profits, it is not as easy to determine Berkshire’s normal earnings power as it would be, for say, Kraft’s food packaging divisions which have pretty predictable demand for macaroni and cheese, Oscar Meyer hot dogs, and Maxwell House coffee, but still–$12 billion is a good estimate of what “normal” profits look like each year for Berkshire shareholders.
And although Warren Buffett is starting to sell off some of his Berkshire stock to donate to charity, he still owns about 1/3 of the total company. That means $4 billion of Berkshire’s profits belong to him.
So when Warren Buffett wakes up in the morning, this is what he knows:
(1) He is going to make $4 billion in annual profits from Berkshire’s holdings in … Read the rest of this article!