ClaimsWarren Buffett

“Nevertheless we feel that overall the transaction will prove satisfactory for Berkshire.”

Warren Buffett, Berkshire chairman 28 February 2002 Chairman's Letter (2001) (Berkshire Hathaway) archived copy

Prediction Their own work or organisation

Berkshire expects the FINOVA transaction overall to prove satisfactory for Berkshire.

Mostly true True in substance, wrong in a detail.

Prediction: Statements about events outside the person's control, checked once they fell due: did they come true?

The second judge would not resolve this claim; the verdict shown is the first judge's.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

Judge on Berkshire's overall financial result from its FINOVA involvement (the Berkadia loan, its equity interest and any FINOVA securities it held) once that involvement ended. True: Berkshire's later reports or reliable accounts show the Berkadia loan was repaid in full with interest and the transaction as a whole made Berkshire a clear net gain. Mostly true: there was a net gain overall, but a small one, or one part (such as the equity stake or bond holdings) lost money while the whole still made a profit. Mixed: the result was roughly break-even overall. Mostly false: a modest net loss overall. False: a substantial net loss, or Berkshire itself later describes the transaction as unsatisfactory or a mistake overall.

Set before the research began.

Evidence (4)

  1. E1 Untitled (FINOVA Group Inc. Form 8-K) The FINOVA Group Inc. (filed with the SEC) · 9 February 2004

    “announced that its principal operating subsidiary, FINOVA Capital Corporation, has fully repaid its $5.6 billion loan from Berkadia LLC, a joint venture between Berkshire Hathaway, Inc. and Leucadia National Corporation.”

  2. E2 Berkshire Hathaway Inc. 2003 Annual Report Berkshire Hathaway Inc. (filed with the SEC) · 2004 Own record

    “In February 2004, the FINOVA loan was repaid in full. Thus, earnings from Berkadia in 2004 will be nominal.”

  3. E3 Berkshire Hathaway Inc. 2003 Annual Report Berkshire Hathaway Inc. (filed with the SEC) · 2004 Own record

    “During 2003, pre-tax earnings included about $101 million from Berkadia as compared to $115 million in 2002.”

  4. E4 [PDF] FORM 10-Q - BERKSHIRE HATHAWAY INC. Berkshire Hathaway Inc. (Form 10-Q/A) · 14 March 2002 Own record

    “Due to post-August 21 operating losses of FNV, the investment in FNV stock was completely written-off.”

Reasoning

A FINOVA SEC filing independent of Berkshire states that the $5.6 billion Berkadia loan was fully repaid by February 2004 (E1). Berkshire's 2003 annual report confirms the repayment and reports Berkadia pre-tax earnings of about $115 million in 2002 and $101 million in 2003 (E2, E3). Berkshire's own filing also shows its investment in FINOVA stock was completely written off (E4), so one part of the deal lost money. The evidence does not give the size of that write-off, so the net gain cannot be fully measured. Still, the loan was repaid in full and earned substantial income, which fits a profitable whole with one losing part.

Cite this claim

Warren Buffett, “Berkshire expects the FINOVA transaction overall to prove satisfactory for Berkshire.” (said 28 February 2002). Verdict: mostly true. Reliability API, claim c_1ff0e16eace6, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_1ff0e16eace6

This claim is in dataset release v1.1.2, with the same verdict.

Reply to this claim

For Warren Buffett, or someone speaking for them: a correction or counter-evidence. Replies are read before anything is shown; an approved reply shows your name, role, date, statement and link. Your email address is never shown and is deleted 30 days after the decision (privacy).

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All of them

Verdicts are made automatically; how verdicts are made.