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									    Ticker:           BRK-B                 Berkshire Hathaway Inc.—B
    Sector:           Financial Services
    Industry:         Insurance (General)   Company Profile
                                            Berkshire Hathaway owns and operates
                                            over 70 businesses in addition to investing
    Recommendation: HOLD                    in undervalued equities and bonds1. The
                                            initial company was founded in 1888 and
                                            the current management was founded in
    Pricing                                 1965. The current CEO and Chairman is
    Closing Price     $3,578 (June 22)      Warren Buffet. The current Vice
    52-Wk High        $3,825                Chairman is Charlie Munger. Over the
    52-Wk Low         $2,982                last 25 years, the company has seen an
                                            average annual return of over 25%2.
                                            Berkshire is the world’s only AAA rated
    Market Data                             reinsurer3.
    Market Cap        $165.1 B
    Total Assets      $261.678 M                  Large Stakes in3:
    Trading Vol       10,080                          o Coca-Cola
                                                      o Moody’s
                                                      o American Express
    EPS (ttm)         $7326.67                    Insurance Stakes3:
    P/E (ttm)         0.49                             o Geico
                                                       o General Re
                                                       o National Indemnity
    Profitability & Effectiveness (ttm)
    ROA               4.22%                       Diversity2:
    ROE               9.53%                           o Candy Production
    Profit Margin     8.15%                           o Home Furnishing
    Oper. Margin      12.37%                          o Retail
                                                      o Encyclopedias
    Current Shares 15 Class B                         o Vacuum Cleaners
                                                      o Jewelry Sales
                                                      o Footwear
                                                      o Newspaper Publishing
                                                      o Uniform Manufacturing
    Report By
    Kyle Williams

  Yahoo Finance
Motivation for Initial Purchase
February 2, 2007, a decision was made to convert the existing single share of BRK-A
stock into 30 shares of BRK-B stock. From there, the class sold 15 shares to stay below
the 5% holding limit set by the Investment Fund Management Manuel. The basis for
converting the Class A stock into Class B stock was to create more flexible liquidity
when holding Berkshire Hathaway stock—especially when there is a limit to how much
of the portfolio’s value can be concentrated in one holding. The Class B stock was
valued at 1/30th the price of the Class A stock. So it was possible to sell smaller portions
of the investment. The logic behind adding the liquidity characteristic to holding
Berkshire Hathaway stock is still one that makes perfectly good sense with the current
portfolio and the IFM Manuel constraints.

When the class converted the single share of Class A stock into Class B stock, they were
able to purchase 30 shares at $3,516.67 per share. Of the converted stock, only 15 shares
were kept at a total cost of $52,750.01. As of June 22, 2007, the market value of the 15
shares of BRK-B was worth $53,670. The performance of the stock since converting to
Class B stock is a 1.74% increase, where performance is calculated by subtracting the
buying cost from the current value and dividing that number by the buying cost.

                                           CurrentValue  Cost
                           Performance 

                             Cost          Value     Performance
                           (2/2/07)      (6/22/07)     (6/22/07)
                          $52,750.01    $53,670.00      1.74%

As it can be seen, the total performance is not particularly high at the moment. However,
when initially making the decision to buy this stock, the class understood that this would
benefit the portfolio in the long term rather than the short term. Considering the past
performance history of Berkshire Hathaway, BRK-B holdings are stocks that create a
steady foundation to build the rest of the portfolio on. I believe that this is one reason
that the class chose to invest in Berkshire initially.
As it can be seen from the Chart 14, the Berkshire Hathaway stock has continuously out
performed the S&P 500, but has not performed better than the General Insurance industry
since 2003. Chart 25 shows that in the last year, the S&P 500 has occasionally out
performed the Berkshire Hathaway stock. Additionally, BRK-B has not performed better
than the S&P 500 since the middle of April 2007.

                                        Chart 1

                                        Chart 2

    Yahoo Finance
It can be seen in Figure 16 that currently Berkshire Hathaway is performing extremely
well compared to the Industry Average and to its peers. Morningstar gives BRK-B a
grade of A in both the Growth and Profitability categories. Any of the stocks presented
in the figure that have an A or A+ in one category receives a grade lower than an A in the
other. Therefore, based on these grades, BRK-B is one of the best—if not the best—
performing stocks within the General Insurance industry.

                                         Figure 1

Economic Consideration
With a newly run congress and the presidential elections a little over a year away, there is
the possibility of several new legislations passing that could force several companies to
grow significantly. The key for Birkshire Hathaway is that, in the past, Warren Buffet
has been very intuitive when it comes to investing in companies that show promise.

Mortgage rates fall to 6.69% for 30-year fixed-rate mortgages. This could increase the
purchase of homeowner’s insurance, which would benefit BRK-B. However, there has
been a lack of mortgage applications that suggests the U.S. housing remains in a

The National Oceanic & Atmospheric Administration (NOAA) is predicting a 75%
chance of an above normal 2007 Atlantic Ocean hurricane season with 13 to 17 named
storms—seven to ten of which are predicted to become hurricanes (See Appendix B for
the full article). Any companies dealing solely in insurance and reinsurance will see low
performance if these predictions are accurate. However, Berkshire Hathaway’s diversity
will result in less of an impact on the company in an above normal hurricane season than
regular insurance and reinsurance companies.

Even though currently BRK-B is not performing as well as the class’s benchmark of the
S&P 500, there are many positive characteristics to this company that make it a strong
holding to have within the Investment Fund Management’s portfolio. These
characteristics are:

      Berkshire Hathaway Inc. has had a strong performance for over 25 years.
      Warren Buffet is the CEO and Chairman.
      Berkshire is the only AAA rated reinsurer in the world.
      The company is extremely diverse and has investments in several well-known
      The Morningstar grades for BRK-B are at the top of the General Insurance
      Staying with BRK-B would give a more secure holding in the Financial sector
       because of its diversity.

Based on the previous 25 years of performance that Birkshire Hathaway Inc. has had over
the S&P 500, I believe that the performance will rebound from its current downturn and
outperform the S&P 500 shortly. Therefore, I recommend that the class hold at the
current quantity of Birkshire Hathaway Inc. Class-B stock. With 3.9% of the portfolio’s
holdings, I do not believe that more of BRK-B should be purchased.
                        Appendix A: Current Holdings

             Businesses Owned                       Common Stock Holdings
Geico                                   American Express Co. (12.6%)
General Re                              American Standard Companies
Kansas Bankers Surety Company           Anheuser-Busch Cos. (4.7%)
National Indemnity Company              Burlington Northern Santa Fe Corporation (10.9%)
Wesco Financial Corporation             The Coca-Cola Company (8.6%)
Applied Underwriters Inc.               Comcast
Borsheim's Fine Jewerly                 Comdisco
Business Wire                           ConocoPhillips (1.1%)
Clayton Homes                           Costco Wholesale
Dairy Queen                             Diageo PLC
FlightSafety International              First Data Corporation
Forest River                            Gannett
Fruit of the Loom                       General Electric
Helzberg Diamonds                       The Home Depot
ISCAR Metalworking                      H&R Block Inc.
Jordan's Furniture                      Ingersoll Rand
McLane Company                          Iron Mountain
Mouser Electronics                      Johnson & Johnson (0.7%)
Nebraska Furniture Mart                 Lexmark International
NetJets                                 Lowes Companies
The Pampered Chef                       M&T Bank (6.1%)
Russell Corporation                     Moody’s Corporation (17.2%)
See's Candies                           Mueller Industries
TTI, Inc.                               Nike
World Book                              Outback Steakhouse
Xtra Lease                              PetroChina (1.3%)
Garan                                   Pier 1 Imports
Fechheimer Brothers                     Posco (4.0%)
H.H.Brown Shoe Group                    Procter & Gamble Co. (3.2%)
Acme Boots                              Sanofi-Aventis
Justin Brands                           Sealed Air
Acme Building Brands                    ServiceMaster
Benjamin Moore & Co.                    Shaw Communications
Johns Manville                          SunTrust Banks
MiTek                                   Tesco (2.9%)
Shaw Industries                         Tyco International
R. C. Willey Home Furnishings           UnitedHealth Group
Star Furniture Company                  United Parcel Service
CORT Business Services Corporation      USG (19.0%)
Scott Fetzer                            U.S. Bancorp (1.8%)
The Buffalo News                        Wal-Mart Stores Inc. (0.5%)
CTB International Corp.                 The Washington Post Company (18.0%)
MidAmerican Energy Holdings Company     Wells Fargo (6.5%)
                                        Wesco Financial Corporation
*from Wikipedia.org                     White Mountains Insurance (16.0%)
                    Appendix B: 2007 Hurricane Season Outlook

                                  13 to 17 Named Storms Predicted

                                             May 22, 2007 — Experts at the NOAA
                                             Climate Prediction Center are projecting
                                             a 75 percent chance that the Atlantic
                                             Hurricane Season will be above normal
                                             this year—showing the ongoing active
                                             hurricane era remains strong. With the
                                             start of the hurricane season upon us,
                                             NOAA recommends those in hurricane-
                                             prone regions to begin their preparation
                                             plans. (Click NOAA image for larger
                                             view of NOAA’s 2007 Atlantic
                                             hurricane season outlook. Please
                                             credit “NOAA.”)

"For the 2007 Atlantic hurricane season, NOAA scientists predict 13 to 17 named
storms, with seven to 10 becoming hurricanes, of which three to five could become
major hurricanes of Category 3 strength or higher," said retired Navy Vice Adm.
Conrad C. Lautenbacher, Ph.D., undersecretary of commerce for oceans and
atmosphere and NOAA administrator. An average Atlantic hurricane season brings 11
named storms, with six becoming hurricanes, including two major hurricanes.

Climate patterns responsible for the expected above normal 2007 hurricane activity
continue to be the ongoing multi-decadal signal (the set of ocean and atmospheric
conditions that spawn increased Atlantic hurricane activity), warmer-than-normal sea
surface temperatures in the Atlantic Ocean and the El Niño/La Niña cycle.

Last year, seasonal hurricane predictions
proved to be too high when an
unexpected El Niño rapidly developed
and created a hostile environment for
Atlantic storms to form and strengthen.
When storms did develop, steering
currents kept most of them over the
open water and away from land. (Click
NOAA image for larger view of
conditions in the Atlantic Basin that
can produce an above normal
hurricane season. Please credit

"There is some uncertainty this year as to whether or not La Niña will form, and if it
does how strong it will be," said Gerry Bell, Ph.D., lead seasonal hurricane forecaster
at the NOAA Climate Prediction Center. "The Climate Prediction Center is indicating
that La Niña could form in the next one to three months. If La Niña develops, storm
activity will likely be in the upper end of the predicted range, or perhaps even higher
depending on how strong La Niña becomes. Even if La Niña does not develop, the
conditions associated with the ongoing active hurricane era still favor an above-
normal season."

Bell also noted that pre-season storms, such as Subtropical Storm Andrea in early
May, are not an indicator of the hurricane season ahead. "With or without Andrea,
                                             NOAA's forecast is for an above normal

                                              "With expectations for an active season,
                                              it is critically important that people who
                                              live in East and Gulf coastal areas as
                                              well as the Caribbean be prepared," said
                                              Bill Proenza, NOAA National Hurricane
                                              Center director. "Now is the time to
                                              update your hurricane plan, not when
                                              the storm is bearing down on you."
                                              (Click NOAA image for larger view of
                                              tracks of major hurricanes forming
                                              in the main development region as
                                              indicated by the green box over a
                                              24-year period. Please credit

The Atlantic hurricane season runs from June 1 through November 30, with peak
activity occurring August through October. The NOAA Climate Prediction Center will
issue an updated seasonal forecast in August just prior to the historical peak of the

The Atlantic Hurricane Seasonal Outlook is an official forecast product of the NOAA
Climate Prediction Center. Instituted in 1998, this outlook is produced in
collaboration with NOAA scientists at the NOAA Climate Prediction Center, NOAA
National Hurricane Center, NOAA Hurricane Research Division and the NOAA
Hydrometeorological Prediction Center. The NOAA National Hurricane Center has
hurricane forecasting responsibilities for the Atlantic as well as the East Pacific
basins. The NOAA Climate Prediction Center, NOAA National Hurricane Center and
the NOAA Hydrometeorological Prediction Center are three of the NOAA National
Weather Service's nine NOAA National Centers for Environmental Prediction, which
provides the United States with first alerts of weather, climate, ocean and space
weather events.

   NOAA, an agency of the U.S. Commerce Department, is celebrating 200 years of
 science and service to the nation. From the establishment of the Survey of the Coast in
 1807 by Thomas Jefferson to the formation of the Weather Bureau and the Commission
   of Fish and Fisheries in the 1870s, much of America's scientific heritage is rooted in
 NOAA. NOAA is dedicated to enhancing economic security and national safety through
the prediction and research of weather and climate-related events and information service
 delivery for transportation, and by providing environmental stewardship of the nation's
coastal and marine resources. Through the emerging Global Earth Observation System of
  Systems (GEOSS), NOAA is working with its federal partners, more than 60 countries
     and the European Commission to develop a global monitoring network that is as
                 integrated as the planet it observes, predicts and protects.
Appendix C: Financial Statements 1st QRT 2007

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