Buffett opened the letter by acknowledging that he has sometimes made errors over time with out providing many particular examples, however he assured shareholders that the person he has chosen to at some point succeed him as CEO, Greg Abel, is not one in every of them. He wrote that Abel will likely be able to act every time he spots vital funding alternatives.
“We’re neutral in our alternative of fairness automobiles, investing in both selection primarily based upon the place we will finest deploy your (and my household’s) financial savings. Usually, nothing appears to be like compelling; very sometimes we discover ourselves knee-deep in alternatives. Greg has vividly proven his potential to behave at such occasions,” Buffett wrote.
And Abel can have loads of sources to work with provided that Berkshire now holds $334.201 billion money after promoting off a lot of its Apple and Financial institution of America inventory previously 12 months and persevering with to generate cash from all its subsidiaries that embody Geico insurance coverage, BNSF railroad, a group of main utilities and an assortment of main producers and well-known retail companies that embody manufacturers like Dairy Queen and See’s Sweet. That is nearly double the $167.6 billion money Berkshire held a 12 months in the past.
Buffett did discover a number of issues to make use of a few of that money on final 12 months by spending $3.9 billion to amass the remainder of its utility enterprise from the property of a former companion and one other $2.6 billion to purchase the remainder of the Pilot truck cease chain. Buffett stated he additionally elevated Berkshire’s funding in 5 main Japanese conglomerates. Berkshire has now spent $13.8 billion over the previous six years on these Japanese investments that are actually value $23.5 billion.
However whereas Buffett has struggled to seek out main acquisitions lately he affirmed that he has no plans to supply a dividend. In what is likely to be a nod to the 94-year-old Buffett’s age, the legendary investor introduced that this 12 months’s shareholder assembly in Could that routinely attracts tens of 1000’s of individuals will likely be shorter. Buffett and Berkshire’s two vice chairmen will solely reply questions from 8 a.m. till 1 p.m. – a number of hours lower than normal. Buffett additionally acknowledged utilizing a cane as of late to keep away from “falling flat on my face.”
