Did you use operating earnings instead of net earnings?

Net Earnings. Mr. Buffett divulged his recipe for owner earnings a year or so before the cash
flow statement became mandatory. I had the luxury (curse?) of using Berkshire's cash flow
statements going back 20 years. To keep it simple, I started with cash from operations which
is derived starting with net earnings.

Also, Chris Bloomstran...

He values Berkshire in a number of ways. My simple strawman resembles one of them. He starts
with cash from operations like I did. Then he subtracts maintenance capex rather than all capex
like I did. After that, resemblance fades. He adds adjustments -- the major one being the
retained earnings of the stock portfolio -- to get what he calls Economic Earnings.

Here's a comparison of my strawman to his method for 2021:

                                           me                    him
                                       ----------            ------------

Cash from Operations                     39,421                 39,421
Capex                                   -13,276 all capex       -9,500 just maint capex
                                         ------                 ------
Owner Earnings                           26,145                 29,921

Stock portfolio retained earnings                               11,800
Other adjustments                                                5,179
                                                                ------
Bloomstran's Economic Earnings                                  46,900

An advantage to both is removing the noise of the stock portfolio.

Ears

Berkshire Hathaway FAQ

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