(May 5, 2007) Buffett expects "suffering" in the subprime mortgage market, but doesn't see it as a "huge anchor" for the economy. Munger partially blames "evil and stupid" accountants. He and Buffett also debunk the commonly-held belief that volatility is a measurement of risk, and Buffett explains why he is "outsourcing" his philanthropy.
Berkshire's per-share book value soared 18.4 percent higher in 2006, topping the S&P's 15.8 percent gain. The company's $16.9 billion increase in net worth was seen as a record for any American business not involved in a merger. In his letter, however, Buffett had a "confession." After big storm-generated losses the previous two years, Berkshire's insurance operations got lucky: "Mother Nature, bless her heart, went on vacation."READ 2006 LETTER (DATED FEB. 28, 2007)