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Buffett Picks Put Berkshire in Growth Push

"Our share of this quartet's earnings, however, would have been far greater: $3.3 billion," he continued. "Charlie and I believe that the $2.4 billion that goes unreported on our books creates at least that amount of value for Berkshire as it fuels earnings gains in future years. We expect the combined earnings of the four -- and their dividends as well -- to increase in 2012 and, for that matter, almost every year for a long time to come. A decade from now, our current holdings of the four companies might well account for earnings of $7 billion, of which $2 billion in dividends would come to us."

Some bets didn't work out in 2011, Buffett acknowledged, noting that last year he had predicted a housing recovery would probably begin within about year.

"I was dead wrong," wrote Buffett, who noted the impact on Berkshire's investment in Clayton Homes, the largest home producer in the U.S.

Full-year net income slipped to $10.3 billion from $13 billion in 2010. In 2011, Berkshire's stock dropped more than 4%, underperforming the S&P 500. Year to date, the company's shares are up nearly 5% to $120,000.

For more on Warren Buffett's investments, see Berkshire Hathaway's portfolio.

-- Written by Antoine Gara in New York

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