Posted by & filed under Company Analysis, Management Issues.

Description:  Peddling credit cards isn’t so easy that a caveman can do it. That seems to be the conclusion Berkshire Hathaway (BRKA, Fortune 500) chief executive Warren Buffett reluctantly reached last year, when he shut down a money-losing credit card business he had dreamed up for Berkshire’s Geico car-insurance unit.

Source: CNNMoney.com
 
Date: 02/27/2010

Link: http://money.cnn.com/2010/02/27/news/companies/berkshire.geico.fortune/index.htm

Questions for discussion:

  • Does this article suggest that Warren Buffett might have overstepped his role as a financial guru by making a managerial decision for one of the companies that Berkshire Hathaway happened to own?
  • Do you think investors in Berkshire Hathaway have changed their thinking about the management of the firm because of this loss?
  • How would you expect the stock value to react, if they have?

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