What Buffett’s billions are telling us

Unsustainable US trade deficit: What Buffett's billions are telling us - at Moneyweek.co.uk - the best of the week's international financial media.

If Warren Buffett is not making money, there may be little chance for the rest of us. His annual letter to shareholders earlier this month reported unfavourably on his performance in 2004. But what is underperformance for him would be regarded as satisfactory performance by many investors.

Last year Berkshire Hathaway's book value gain was 10.5 per cent against the return of 10.9 per cent on the S&P 500 index. For Warren Buffett that is slightly worse than standing still. What is really interesting is that he says he could not find attractive securities to buy. He has plenty of cash, waiting for any opportunity. In fact, he ended 2004 with $43 billion in cash equivalents.

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William Rees-Mogg was Editor of The Times from 1967 to 1981. He served as High Sheriff of Somerset and was Chairman of the Arts Council of Great Britain. He was the father of the politicians Sir Jacob and Annunziata Rees-Mogg.