Not being an expert on the current state of accounting principles, the ability to hold stocks like KFT on your balance sheet and not write them down to market value because "you are confident that they will appreciate" would strike one as totally amorphous, spongelike, and grievously misleading if anyone other than the sage were to say it, but in his case would seem like a sanctimonious display of ignorance and epater the bourgeoisie.

Stefan Jovanovich writes:

I am too lazy to do the research, but I suspect the answer is to be found in the reserve accountings required under the various state insurance laws and regulations that Berkshire and its subs have to comply with. Buffett and Charlie (I don't need to show you no stinking compassion) have been playing that flute and harp duo for decades: contingent policy liabilities deductible against present taxes UP, present restricted - i.e. has to be in plain cash with no derivative chasers - reserve contributions DOWN. No wonder they have such instinctive sympathy for the public employee unions and come up with the same policy prescription– namely, the rest of us should pay more taxes. 


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