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The last act this last week was played out Saturday, May 6, 2023, Berkshire Hathaway's annual meeting.
Berkshire kicked off Saturday’s proceedings by releasing its results for the first quarter. The company reported net income of $35.5 billion, or $24,377 a class A share equivalent. That was up from $5.58 billion, or $3,784 a class A share equivalent, a year earlier.
Look at that: one year ago, same quarter, $3,784 / share in net income compared to $24,377 in net income per share this same quarter one year later. Buffett explained it away, downplayed it (knowing that the next quarter can't possibly be as stellar), and pundits did the same. Most remarkable, that data point was buried near the end in the WSJ article from which it came. Am I missing something?
To put that in perspective, imagine your salary in 2022: $38,000. Now, imagine your salary jumping to $240,000 one year later.
Double 4, you get 8; double 8, you get sixteen; and then 50% more and you get 24. So, BRK doubled its net income twice, and then another 50% y/y.
The penultimate act this last week ended with the Dow surging 550 points and all economic data suggesting the US is doing much better than expected. That much-predicted, much-anticipated, much-elusive recession is, again, pushed to the right.
In less than a week, GDPNow went from 1.1 to 2.7 for the second quarter.
Even in NYC, it's now being reported that that are watering holes where there is a decided return to extraordinary lavishness, where a glass of wine is priced at $98. A glass of wine. I assume Torrisi cites inflation for charging $98 for a glass of wine. Torrisi has a 90-minute limit on how long one can stay at the bar / restaurant.
From an energy standpoint, look at this "Focus on Fracking" lede as the week began.
The Strategic Petroleum Reserve is at another 39-year low, US gasoline demand is at a 16-month high after the greatest one week jump in 22 years.
Think about that: US gasoline demand at a 16-month high after the greatest one-week jump in 22 years.
That "edition" of "FOF" was posted April 30, 2023.
Compare that side-by-side with my blog of April 28, 2023.
"FOF" corroborated my argument that we can say with certainty that the US is now "back to normal."
The US shutdown spring, 2020. Reset: spring, 2023.
One almost has to eliminate three years when comparing data points -- these data points in almost any analysis are worthless:
- March, 2020 - February, 2021
- March, 2021 - February, 2022
- March, 2022 - February, 2023
Those dates are a bit problematic when folks track "calendar years," January to December, not March to February.
With that in mind: one has to eliminate three years when comparing data points -- these data points in almost any analysis are worthless:
- January, 2020 - December, 2020 -- CY 20
- January, 2021 - December, 2021 -- CY 21
- January, 2022 - December, 2022 -- CY 22
March, 2023: reset.
Year-over-year for me is now x-month, 2023 / x-month 2019. This is a great example of what I'm talking about:
- CY / FY, 2019: $81.417 billion
- CY/ FY, 2022: - $22.819 billion
- CY/ FY, 2023: ? -- but 1Q23 was $35.5 billion.
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