Buffett completely got rid of the retained earnings test in the 2018 annual report. Beginning in the 2019 report, Berkshire stopped showing the % increase in book value column in the performance table which now only compares the market price return of Berkshire stock to the total return of the S&P 500 index on an annual basis.

Also in the 2018 annual report, Buffett told us to focus on the Berkshire's stock price over the long term (though he didnlt define "long term") to judge if retained earnings are being wisely used. So I don't think Abel is going to put out another mathematical formula to replace the old retained earnings test.

We should follow Warren's advice and just focus on the long term growth in the price of Berkshire stock to see how the management is doing.

Berkshire Hathaway FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.