FOR YEARS, chemical maker Lubrizol filed annual reports with US regulators that ran 80 pages or more, detailing everything from its inventory to pension obligations. Today, investors have to do complicated maths to figure out the company's earnings from a mixture of public documents.
The reason? Warren Buffett's Berkshire Hathaway bought Lubrizol in 2011 for about €7bn – and now lumps together the results with those of several other manufacturing businesses.
It doesn't quite make sense. Mr Buffett (83), below, has long highlighted his desire to give shareholders equal access to info about his company. The billionaire Berkshire chairman and ceo often includes self-critiques in letters to investors and takes hours of questions at an annual meeting.
Yet Berkshire, which is poised to post record full-year profit next week, has become more opaque during his five-decade-long acquisition spree. "It's a critical issue," said US analyst Meyer Shields. As the company gets bigger, investors increasingly have to rely on Buffett's reputation rather than data, he said.
But the billionaire's track record of generating market-beating returns has persuaded many investors that they know enough, said Mr Shields. Buffett took over Berkshire in 1965 and transformed it from a textile maker into a $280bn holding company in a range of areas – even Irish health insurance, following a massive reinsurance deal with the VHI. Along the way, he made himself and many early backers rich.