Berkshire Hathaway in record profit

The investment firm run by the US billionaire Warren Buffett has reported a record profit for 2013. Berkshire Hathaway made $19.5bn (£11.6bn) last year, up from $14.8bn (£8.8bn) in 2012. "On the operating front, just about everything turned out well for us last year - in some cases very well," Mr Buffett wrote to shareholders. However it underperformed the S&P 500 share index for the fifth year in a row. The growth in the company's book value - that is the company's assets minus its liabilities and Mr Buffett's preferred measure of Berkshire's performance - was 18.2% in 2013, while the S&P 500 rose 32.4%. But Mr Buffett said that was to be expected when the S&P performed well. "We expect to fall short... in years when the market is strong - as we did in 2013. "We have underperformed in 10 of our 49 years, with all but one of our shortfalls occurring when the S&P gain exceeded 15%." He added that the fund had outperformed the stock market between 2007 and 2013 and that through a full six year cycle he expected to do that again. "If we fail to do so, we will not have earned our pay," he wrote. Berkshire Hathaway increased its holding in Coca-Cola Mr Buffett, ranked fourth on the Forbes rich list, pointed to a strong performance in the firm's insurance, rail and energy businesses for the increase in profit. (BBC, 2014/3/2)