Due to the financial fallout from the COVID-19 pandemic, the number of U.S. bankruptcy filings by companies with over $100 million in assets was 84 percent higher during the first three quarters of 2020 compared to the same period last year, according to a new report from Cornerstone Research. The report, entitled “Trends in Large Corporate Bankruptcy and Financial Distress: 2005-Q3 2020” (here), shows that the increase in the number of bankruptcies was particularly pronounced for “mega bankruptcies” (involving companies with over $1 billion in reported assets). However, the report also suggests that the number of bankruptcy filings by companies with over $100 million in assets may have peaked in July. Cornerstone Research’s October 28, 2020 press release about the report can be found here.
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U.S. Economy
A Closer Look at Buffett’s Annual Letter to Berkshire Shareholders
A highly anticipated event in the financial world each year is the release of legendary investor and Berkshire Hathaway Chairman Warren Buffett’s annual letter to the company’s shareholders. Market watchers and other observers value Buffett’s annual letter for its valuable insights about the financial marketplace, as well as for Buffett’s homespun humor and his wise insights about the economy and the world. In this year’s letter (here), which the company released on Saturday morning, Buffett had quite a bit to say about the current prospects of the American economy. Many of Buffett’s remarks about the U.S. economy were expressly intended to counter the relentlessly negative tone of the current U.S. Presidential election campaign. The letter also contains an interesting commentary about both the beneficial and disruptive effects resulting from gains in productivity; the commentary includes a cautionary note about the need to assist those disadvantaged by the rapid changes that often accompany technical innovations. The letter also contains a rather sobering assessment of the risks the world currently faces. (Full disclosure: I own BRK.B shares, though not nearly as many as I wish I did.)
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