sample
Haven't found the Essay You Want?
For Only $12.90/page

Black–Scholes Essay Topics & Paper Examples

Berkshire Hathaway Phenomenon In the Context of Modern Finance Theory

Berkshire Hathaway Phenomenon In the Context of Modern Finance Theory Septtember 2013 Berkshire Hathaway Phenomenon In the Context of Modern Finance Theory Introduction Over the 46 years ending December 2012, Warren Buffett (Berkshire Hathaway) has achieved a compound, after-tax, rate of return in excess of 20% p.a. Such consistent, long term, out performance might be viewed as incompatible with modern finance theory. This essay discusses the Berkshire Hathaway phenomenon in the context of modern finance theory. Part 1 Modern Portfolio Theory Berkshire Hathaway’s investing strategies mainly differ with modern portfolio theory on two aspects. The first one is the attitude towards the undesirable thing in investment. And the second one is the perspective of diversification. As Harry Markowitz pointed out…