In Berkshire Hathaway, 2019 is another good year, and the opportunity for its leader, Warren Buffett, to prepare his company, not his life.
In his latest letter to investors, published on Saturday morning, the billionaire largely to commend him$566 billion conglomerate, whose portfolio includes the insurance company, a new evaluation will be disclosed, the chemicals manufacturer Lubrizol, fruit of a shirt-jacket and the like.
“Our unparalleled Mountain Capital, a wealth of cash and a huge and diverse stream of non-insurance income will allow us far more investment flexibility than is usually available to the other companies in the industry,”he said.
The annual report is accompanied by the latest assessment of Berkshire’s financial position: the company reported$29 billion of net income in the fourth quarter of 2019, to $ 81. 4 billion dollars for last year overall. Operating earnings, Mr. Buffett’s priority measures of financial performance declined slightly last year from 2018 to 24 million dollars.
In a further show of faith in his company’s value, Mr. Buffett said, Berkshire spent $ 5 billion buying back its own stock last year. However, investors hope that the company will spend more on share repurchase,because the Loosening its policies on these operations in 2018.
Is week six of a letter provides one of the best of Mr. Buffett, investors around the world hang on to his statement as America’s favorite capitalist uncle.
There are one-liners, like a comparison of the company’s acquisition of the marriage the beginning of”a happy wedding—but the reality often deviates from the pre-marital expectations.”
There is a complaint, and Berkshire, with a $ 128 billion dollar cash hoard, and Mr. Buffett want to spend a lot of acquisitions, not very large opportunity to do so. (Missing the action, this year is his favorite explanation, piles of cash,”elephant gun.”)
On the contrary, Mr. Buffett wrote,”the vagaries of the stock market provides the opportunity for us to buy a large, but non-control positions in publicly traded companies that meet our standards.” Currently, including the $ 73 billion dollar stake in Apple for $ 3.3 billion in Bank of America Securities and $ 22 million in the Coca-Cola Company stock.
Mr. Buffett also indicated that Berkshire, worth about 27%of the shares of Kraft Heinz, a packaged foods company, is one of the largest recent transactions, and It’s one of the most prominent investment trigger in recent years at about $ 13.8 billion. In contrast, Mr. Buffett’s annual letter to the 2018 year value of its Kraft Heinz shares for $ 17. 6 billion dollars.
The billionaire also take the time to complain about the poor state of many of the corporate Board of Directors:
Too few women.
The Board of Directors are often subject to a management team, they are to oversee, especially when it comes to the purchase, the Executive heads of the ideal. “Don’t ask the Barber whether you need a haircut,”he wrote.
Too many Directors with the management team in the hope of obtaining a good reference, so they can be added to a second Board of the company and earn more salary. “When seeking a Director, chief Executive not to see a bullfight,”Mr. Buffett wrote. “This is the Cocker Spaniel, to obtain the take of the family.”
However, as in many years past, this year’s letter no live in Berkshire, the subject of the shareholders to be the most eager to know who will succeed Mr. Buffett, now 89, as Enterprise Group CEO. Again and again, Mr. Buffett said, only he a person in the heart, and in the meantime no plans to retire soon.
In Saturday’s letter, Mr. Buffett reiterated that Berkshire is”100% ready”for the day, he and his longtime business partner, Charles T. Munger, 96,left the scene. The reason: Berkshire’s investment is a strong and prudent, the company’s business is under the supervision of capable managers and its remaining Director trusted of course.
This letter reflects one more sign that Mr. Buffett is willing to share the attention with his Deputy, Jain Ajit and Greg Abel, both of them have been widely speculated as a potential successor.
Mr. Buffett said that he would allow the participants of the Berkshire’s Annual Shareholders Meeting in May to direct questions part of a long tradition, where he and Munger Mr. the reply to the query of any topic of any of those people.
Also not addressed in this letter is Mr. Buffett the most recent deal, the sale of Berkshire’s newspaper of the shares, in a sign that he is abandoning the news business.