Buffett started to worry and talk about inflation.
Even compounded 20% return could mean nothing in purchasing power if inflation is 14%, as the other 6% is for tax.
After-tax purchasing power is a more useful measurement.
High inflation also means investing in long-term bonds was making losses.
Buffet was complaining about the gov and dollar – ” We have severe doubts as to whether a very long-term fixed-interest bond, denominated in dollars, remains an appropriate business contract in a world where the value of dollars seems
almost certain to shrink by the day.”
The sarcasm!
On the operation side, Berkshire needed to divest the bank as required by law.
And for textile – Buffett didn’t have confidence this time – ” ‘turnarounds’ seldom turn, and that the same energies and talent are much better employed in a good business purchased at a fair price than in a poor business purchased at a bargain price”.