A tax-free institution would have needed 4.3% annual interest from bond investments over the period described, during which it came to take $7 to buy what $1 had bought, simply to maintain its purchasing power.
Unresolvable The public record could not settle it.
Factual: Statements about the present or the past, checked against the record: did they hold up?
Said for an organisation they lead or work for; it counts on both records.
What would count as true or false
Judge against Buffett's stated period, which in the 2011 shareholder letter is 1965–2011, using official CPI data. True: the CPI shows the dollar losing purchasing power by a factor of about 7 over the period, and the implied annual rate needed to offset that inflation is about 4.3% (within ±0.2 percentage points). Mostly true: the factor or the rate is slightly off (rate within 4.0–4.6%, factor about 6.5–7.5). Mixed: one of the two figures is right and the other is clearly wrong. Mostly false: both are noticeably off, but they point in the right direction. False: the CPI data contradict both figures substantially.
Set before the research began.
Evidence (3)
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E1 2011 letter (.pdf) Berkshire Hathaway Inc. (Warren Buffett, shareholder letter) · 25 February 2012 Own record
“Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time.”
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E2 2011 letter (.pdf) Berkshire Hathaway Inc. (Warren Buffett, shareholder letter) · 25 February 2012 Own record
“During the same 47-year period, continuous rolling of U.S. Treasury bills produced 5.7% annually.”
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E3 Historical CPI-U U.S. Bureau of Labor Statistics
“NOTE: Index applies to a month as a whole, not to any specific date.”
Reasoning
E1 and E3 come from Buffett's own 2011 shareholder letter. They repeat his figures: the dollar fell 86%, and $7 now buys what $1 bought in 1965. They do not check those figures against an outside source. The only independent source is the BLS CPI-U table (E4), and its quote is just a methodological note with no index values, so it cannot confirm the 1965–2011 inflation factor or the 4.3% rate it implies. Without CPI figures in the evidence, the criteria cannot be applied.
Cite this claim
Warren Buffett, “A tax-free institution would have needed 4.3% annual interest from bond investments over the period described, during which it came to take $7 to buy what $1 had bought, simply to maintain its purchasing power.” (said 9 February 2012). Verdict: unresolvable. Reliability API, claim c_ce18c29aab5d, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_ce18c29aab5d
This claim is in dataset release v1.1.2, with the same verdict.
Reply to this claim
More factual claims by Warren Buffett
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Mostly true
“But now we’ve created a structure that didn’t exist when he came in 1986.”
Berkshire has created an insurance structure that did not exist when Ajit Jain joined in 1986.
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Mostly true
“we offered a solution in a couple of days to something that was getting close to the brink.”
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Mixed
“big businesses, generally have done very well about travel and entertainment”
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Mostly true
“the big ones have done terrifically”
Large food manufacturers have done terrifically during the pandemic.
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Resolved true
“we've shut down a lot of people in this, in this particular induced recession and others are prospering”
The pandemic-induced recession has shut down many people's businesses while others are prospering.
Verdicts are made automatically; how verdicts are made.