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OMAHA, Nebr. (AP) – Billionaire Warren Buffett said the company he had built over decades of acquisitions continued to perform well even though he had not concluded any major deals at attractive prices recently.
Buffett issued his annual letter to shareholders of Berkshire Hathaway Inc. on Saturday. He wrote that investors should continue to bet on the US economy because Berkshire has thrived, but that they should not forget the rest of the world.
"There are also many other countries in the world that have a bright future, and we should rejoice about that: Americans will be both prosperous and safer if all nations prosper", wrote Buffett. "At Berkshire, we hope to invest considerable sums across borders."
Buffett's letter is always well-read in the business world because of his remarkable background, his habit of dissecting the economy or other subjects and his talent for explaining complex topics in plain language.
But in recent years, he has simplified his letters and focused primarily on Berkshire's business. The wise counsel and spirit that once formed Buffett's letters to read are now reserved chiefly for the annual meeting and the meetings of the society.
"For me, this is becoming less of an event," said Jim Shanahan, Edward Jones badyst, about the letter.
Buffett wrote that the two potential successors he had promoted last year to oversee most day-to-day operations are doing well, but the 88-year-old mogul has made no mention of his retirement.
Greg Abel and Ajit Jain, Berkshire senior executives, joined the company's board of directors last January and took on new responsibilities. Jain now oversees all of the conglomerate's insurance activities while Abel oversees all non-insurance conglomerate business operations.
"These steps were expected," Buffett said. "Berkshire is now much better managed than when I oversaw operations alone, Ajit and Greg have rare talents, and Berkshire's blood runs in their veins."
Buffett has written that Berkshire continues to hold about $ 130 billion in cash and short-term investments because he has not found reasonably priced acquisitions in recent years, so he will likely continue to invest more in cash. actions.
"Prices are exorbitant for companies with decent long-term prospects," he wrote.
Shanahan, badyst at Edward Jones, said he was disappointed that Berkshire had not used more of its cash to buy back its own stock or invest in other stocks, particularly when the market was down towards the end of the year.
Berkshire announced a profit of $ 4 billion last year, with most of its eclectic activities, including BNSF Railroad, Geico Insurance and several large utilities, having performed well. But this amount was significantly lower than the previous year's $ 45 billion because Berkshire had to write the paper value of many of his shares.
Still, Andy Kilpatrick said the results were better than expected.
"The operating companies of Berkshire are doing well," said Kilpatrick, a retired stockbroker and author of the title "Permanent Value: The History of Warren Buffett". & # 39; & # 39; I am happy to see that we are not talking about retirement. "
Berkshire Hathaway Inc. owns more than 90 companies, including railways and clothing, furniture and jewelry companies. Its insurance and utilities activities generally account for more than half of the company's net income. The company also has significant investments in companies such as Apple, American Express, Coca-Cola and Wells Fargo & Co.
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