Warren Buffett and Berkshire Hathaway 1973

The 1973 Berkshire annual report has a light brown cover...Berkshire earned $12 million...Berkshire Hathaway still has three major divisions in 1973...The divisions are banking, insurance, and textile...The bank owned by Berkshire was Illinois National Bank...It had a return on deposits of over 2.1 percent for the year 1973...Warren continues to report that the bank, seldom goes into a borrowed position, except for short term cash management positions, therefore has excess liquidity...The bank continues to meet the increasing loan demand with its current liquidity...Gene Abegg and Bob Kline did an excellent job managing the bank's net interest margin and operating earnings and make Illinois National a leading bank ... Gene has been with the bank since 1931...
Warren announces that Diversified Retailing will be merged into Berkshire Hathaway...The most important asset of Diversified Retailing is its 16% ownership of Blue Chip Stamps...Warren announces that the Sun Newspaper won a Pulitzer Prize...The first time a weekly newspaper has won a Pulitzer...
Ken Chace is running the textile division and this division had a strong year...Ken Chace and Ralph Rigby's made 1973 a better year than last year...The textile business looks is highly cyclical but 1974 should continue as 1973, albeit a tough one because of the nature and the overall textile industry factors...

This year 1973 is the start of the 1973-74 bear market...Warren would take advantage of the lower stock prices and be very active in the bear market...Warren would purchase blocks of the Washington Post, Affiliated Publications (owner of the Boston Globe), Interpublic Group of Companies (the largest advertising agency), and Ogilvy & Mather International (another large advertising agency)...