- Warren Buffett, the chairman and CEO of Berkshire Hathaway, released his annual letter to shareholders on Saturday alongside the company's fourth quarter 2019 earnings report.
- In the letter, Buffett discussed share buybacks, his death, and Berkshire Hathaway's acquisition strategy going forward.
- Here are the biggest takeaways from the letter.
- Read more on Business Insider.
It's an exciting day for Berkshire Hathaway shareholders and the broader investment community: Warren Buffett has released his annual letter to shareholders alongside the company's fourth-quarter earnings report.
The letter, which Buffett has penned for decades, gives a glimpse into company operations, performance, and strategy, as well as an inside look into what the "Oracle of Omaha '' has been thinking about in the past year.
This year's letter was 14 pages long and boasted quotes from economists such as Edgar Lawrence Smith and John Maynard Keynes. In it, Buffett lamented about the "fickle stock market," "rare" opportunities for buying companies, and the role of boards of directors. He also discussed some plans for his and vice chair Charlie Munger's death, and gave a hint about succession plans.
Buffett also exhibited his usual flourish for humor and wisdom in the letter. In discussing the attributes of a board of directors, he wrote, "if I were ever scheduled to appear on Dancing With the Stars, I would immediately seek refuge in the Witness Protection Program."
He continued: "We are all duds at one thing or another. For most of us, the list is long. The important point to recognize is that if you are Bobby Fischer, you must play only chess for money."
In 2019, Berkshire Hathaway stock posted its worst underperformance of the broader market in a decade, and have gained 1.1% this year through Friday's close. Buffett again failed to make a major acquisition for Berkshire Hathaway. In the absence of a large company purchase, Berkshire Hathaway bought back a record $2.2 billion of its stock in the fourth quarter. Over the entire year, the company spent $5 billion on repurchasing its own stock.
The company posted net earnings of $29.2 billion in the year, up from a loss of $25.4 billion a year earlier when the company had to take a major write-down on its investment in Kraft Heinz Co. Operating earnings fell 23% in 2019 to $4.4 billion. Berkshire Hathaway's record cash pile was $128 billion at the end of 2019, down only slightly from $128.2 billion at the end of the third quarter.
Here are the main takeaways from Warren Buffett's annual letter to Berkshire Hathaway shareholders.