OMAHA, Neb. (AP) — Warren Buffett praised his longtime partner, the late Charlie Munger, for being the architect of the Berkshire Hathaway conglomerate and providing guidance to shareholders. He also said that he was given credit for giving the warning. annual letter Don't listen to Wall Street experts and financial advisors who advise you to trade more often on Saturdays.
Buffett said he was always writing. his letter With smart long-term investors like my sister Bertie in mind, I'm trying to tell them what they want to know about Berkshire.
“She is sensible, very sensible, and instinctively knows that experts should always be ignored,” Buffett wrote of Barty. “After all, if she could reliably predict tomorrow's winners, wouldn't she freely share her valuable insights and thereby increase competitive purchasing? It’s like giving a map to your neighbor.”
Buffett told investors that Berkshire is a safe place to put their money, as long as they don't expect “spectacular performance” in the past. The Omaha, Nebraska-based company's performance. But he said Berkshire is ready to swoop in with its $167.6 billion every time a stock market like casinos is seized.
Cole Smeed, an investor at Smead Capital Management, said that while Buffett reassured investors that he was “ready to buy when things finally become reasonable,” he said, “It's like a den of thieves.” “And they'll be sold,” he said, warning of the dangers on Wall Street. What they can sell you to you. ”
Munger, Buffett's longtime investment partner, died in november At age 99, Buffett is reshaping the failing textile mills he inherited in the 1960s into a large, eclectic conglomerate as Berkshire buys companies such as See's Candy, Geico Insurance, and BNSF Railway. , taking away one of the key opinion boards that Buffett relied on for decades. Berkshire today.
Buffett has already spent some of last year's investments annual letter While Berkshire shareholders expressed their condolences to Munger, this year's edition began with a further celebration of the esteemed songwriter's contributions to Berkshire over the years. “Charlie was the 'architect' of what Berkshire is today, realizing early on that it was better to buy great companies at fair prices,” Buffett said.
“Charlie never tried to take credit for his role as creator, but instead he let me take a bow and take the credit,” Buffett wrote. “In a way, his relationship with me was that of an older brother and a loving father. Even when he knew he was right, he would hand over the reins to me, and even when I messed up, he would never, ever… It didn’t remind me of my mistake.”
Mr. Munger's death is yet another reminder that Berkshire will one day have to move forward without the 93-year-old Mr. Buffett at the helm.
Berkshire is succession plan He said Vice Chairman Greg Abel would eventually replace Buffett as CEO, and that the company's two other investment managers would take over the stock portfolio. Mr. Abel has already overseen all of Berkshire's many non-insurance businesses since 2018, managers of those companies said. Investors don't need to worry Regarding Abel's ability to lead the company. Berkshire allows the company to run itself on a day-to-day basis to a large extent, with headquarters deciding where to invest all the cash the company generates.
Buffett told investors in a letter that Abel is “ready in every way to be Berkshire's CEO tomorrow.”
Edward Jones analyst Jim Shanahan found this comment about Abel comforting, but the problem is that Abel may be afraid that his first big investment will go to waste. It's about being ready to take advantage of the big opportunities when panic occurs.
“I have no doubt, given his management background, that he could come in and run Berkshire today, but I don't know if he's ready to commit huge amounts of capital. No,” Shanahan said.
Kathy Seifert, an analyst at CFRA Research, said Berkshire has “very strong, stable second- and third-tier management,” but they don't get a lot of attention, but investors He said it was natural for him to want to hear the opinions of Abel and fellow vice chairman Ajit Jain, who runs the insurance company. business. It will probably take place at the shareholders' meeting in May this year.
Buffett also talked about how Berkshire's insurance business flourished last year, but its large utilities and BNSF Railway were disappointing. He also told shareholders that he never intended to sell his roughly 30% stake in Occidental Petroleum and 9% stake in five major Japanese trading companies, but that he had no plans to buy oil producers outright. repeated.
Berkshire's eclectic mix of businesses, combined with strong investment performance, resulted in fourth-quarter earnings of $37.57 billion, or $26,043 per Class A share. This is more than double the profit of $18.08 billion ($12,355 per Class A share) that Berkshire reported the previous year.
But Buffett cautioned that investors should largely ignore these bottom-line numbers because they are largely influenced by the paper value of their investments. Instead, he has long urged investors to focus on Berkshire's operating income, which excludes investments.
According to this measure, Berkshire reported a 28% increase in operating income to $8.48 billion, or $5,878.21 per Class A share. This was an increase from $6.63 billion, or $4,527.06 per Class A share.
Three analysts surveyed by FactSet Research expected Berkshire to report quarterly operating profit of $5,710,717 per Class A share.
Berkshire's stock has set a series of records in recent weeks, most recently hitting an all-time high of $632,820 per Class A share on Friday morning as investors awaited Buffett's letter. Mr. Buffett is respected for his track record of remarkable success and for the sage advice he has provided over the decades. His annual letter is one of his most read reports of all time in the business world.
Berkshire also spent $2.2 billion on stock buybacks in the fourth quarter, bringing the full year total to $9.2 billion.
But Berkshire's cash pile continues to pile up at record levels because Buffett can't find large investments at reasonable prices.
One of Berkshire's biggest acquisitions recently was buying the remaining 20% of the Pilot Truck Stop business it hadn't already acquired as part of a 2017 deal. But the deal with the Haslams was thrown into turmoil last year when both Berkshire and the Haslams accused each other of trying to manipulate the pilot's earnings to influence the price Berkshire would have to pay.
of dueling lawsuit This transaction generated the following headlines: bribery charges and other suspected wrongdoing. It was settled in January.Berkshire Purchase completed Last month, it was acquired by the nation's largest truck stop operator for just $2.6 billion.
Buffett did not comment directly on the trade, but said it was wisdom he had learned over the years, echoing the classic advice from 1863 that urged all banks to “never do business with bad guys.” He may have been hinting at that at the time.
Buffett said, “Reading people's minds is not that easy.'' “Honesty and empathy are easily faked. That's as true today as it was in 1863.”
___
For more from The Associated Press on Warren Buffett, go here. https://apnews.com/hub/warren-buffett Or read more Berkshire Hathaway news here: https://apnews.com/hub/berkshire-hathaway-inc Follow Josh Funk online https://www.twitter.com/funkwrite and https://www.linkedin.com/in/funkwrite
