Subject: Re: SOLD : $423.25
You make a convincing argument that most of the impact of interest rate hikes gets eaten up by taxes: the pre-tax real gain is interest minus inflation, but taxes are implied to interest, not just to the interest minus inflation difference.
However, in this case, operating profits (in the special, Berkshirean sense of the word) are post-tax, and have gone from $4.8b (2021) to $6.5b (2022) and now to $9.6b (2023; Item 7, page K-35), so I guess current rates are still better than older rates, inflation notwithstanding.

I still think there is no improvement, other than during a fleeting period that monetary inflation fell before short term rates did. That's the exception, not the rule.

Higher interest income is good, but it has to be enough to offset higher losses on the purchasing power of the cash pile if inflation has risen.

Using simple CPI-U as a proxy for the loss of purchasing power, US currency lost value from end 2017 to end 2020 at a rate of about -1.76%/year. 3-month T-bill rates averaged 1.47% in that stretch, or 1.16% after tax in Berkshire's hands. Net, the cash pile was losing value at around -.6%/year.

Then interest rates rose. Yay! But...
From end 2020 to end 2023 US currency lost purchasing power at a rate of about -5.37%/year. 3-month T-bill rates averaged 2.46%, or 1.94% after tax in Berkshire's hands. Net, the cash pile was losing value at around -3.43%/year.

So, even though there was seemingly a much higher interest income on the cash and short term fixed income investments reported, it was actually a deterioration in the rate of value generation/loss.

Different date ranges will change the size of the problem, but the main point is that the after-tax interest income rate has to rise MORE than the rate of erosion of nominal purchasing power did for the increase in interest rates to have left us better off. Other than a recent transient blip, I don't believe that is the case.

Jim