Excerpts from Berkshire Hathaway Annual Report 1980

"The value to Berkshire Hathaway of retained earnings IS NOT determined by whether we own 100%, 50%, 20% or 1% of the businesses in which they reside. Rather, the value of those retained earnings is determined by the use to which they are put and the subsequent level of earnings produced by that usage. ....... If a tree grows in a forest partially owned by us, but we dont record the growth in our financial statement, we still own part of the tree."

"As we have noted, we evaluate single-year corporate performance by comparing operating earnings to shareholders' equity WITH securities valued at cost. Our long-term yardstick of performance, however, includes all capital gain or losses, realized or unrealized. We continue to achieve a long-term ROE that considerably EXCEEDS the average of our yearly returns. The major factor causing this pleasant result is a simple one: the retained earnings of those non-controlled holdings we discussed earlier have been translated into gains in market value."

"We believe that short-term forecasts of stock or bond prices are USELESS. The forecasts may tell you a great deal about the forecasters, they tell you NOTHING about the future."