NEW YORK (TheStreet) -Market commentators, analysts and fans of WWarren Buffett had their eyes glued to their computer screens this past weekend as they dug through the Oracle of Omaha's annual letter to Berkshire Hathaway (BRK.A) - Get Report shareholders.
This piece is one of the most anxiously anticipated missives in the financial realm and each year droves of individuals from both Wall Street and Main Street carefully parse through this document for an overview and insights into the inner workings of the Berkshire Hathaway empire as well as learn about the company's goals for the future. This year was no different.
Buffett used his expansive and in depth letter to once again highlight his bullishness towards the
This theme has been reiterated numerous times across a wide range of mediums including videos, and
New York Times
opinion pieces. In the introduction to this year's letter, Buffett likened the present to years such as 1776, 1861, 1932, and 1941, explaining that, "America's best days lie ahead."
Reflecting this belief, Buffett focused his attention to a wide range of topics relating to the future of the Berkshire Hathaway empire. In painting a picture for Berkshire's future, Buffett explains that the firm will work for better-than-average performance against major indices. However he makes it explicitly clear that due to the size of the firm, the massive returns witnessed during the Berkshire's early days are now in the past.
Although the company is likely to see less dramatic action to the upside, this comes with a trade off. Looking ahead, Buffett appears confident that Berkshire is well structured to hold up well in the face of economic turmoil.
In order to achieve these forecasted better-than-average returns Buffett will rely on a number of factors such as future acquisitions.
Buffett's acquisition plans have become a
for commentators, fans and investors. Therefore, it was not surprising that the investor made this a major focus in this year's letter. At the start of the piece, Buffett focused on Burlington Northern Santa Fe Railroad, explaining that the deal is working out better than he had expected.
While successful, this is the last big ticket purchase the company has made. Between then and now, Berkshire has compiled a massive pile of cash, leading many to wonder what was next.
Using his notable folksy charm, Buffett explained that he and partner Charlie Munger have their elephant gun reloaded and are prepared and anxious to pull the trigger when an attractive opportunity presents itself.
In the mean time, while Buffett seeks out attractive acquisition targets, he will continue to rely on his dedicated fleet of managers to keep Berkshire Hathaway's performance on par with expectations.
Notable names highlighted throughout the letter included David Sokol, the head of MidAmerican Energy; Ajit Jain, of Berkshire Hathaway Reinsurance Group; and newcomer,
, who has been entrusted to manage between one and three billion dollars of the investor's legendary portfolio.
Fanning the flames of discussion, Buffett once again took time to focus on the topic of Berkshire's CEO successor. He explained that there are multiple candidates in mind for the job of leading the company when Buffett steps down.
Ultimately, 2010 was a year of notable changes for Buffett's company. On top of adding Burlington Northern and Todd Combs the firm said goodbye to investment manager Lou Simpson, who announced his retirement last summer.
Despite these changes, Buffett appears confident in his company's prospects for this year and is prepared for any challenges down the road. At the close of his letter, he provided information regarding the next big Berkshire-related event: the annual shareholder meeting in Omaha on April 30. This year's focus will be on planes, trains and automobiles and like the letter we can expect a great deal of information and insight to shine through.
Written by Don Dion in Williamstown, Mass.
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At the time of publication, Dion Money Management did not own any of the equities mentioned.