Warren Buffett published his annual letter to Berkshire Hathaway $BRK.B Shareholders this weekend. Here are the key takeaways:
Returns of 20.1% annually vs 10.5% for the S&P 500 $SPX500 in the last 57 years
Returning about 10% more than the market may not look so big but because of compound interest, it makes a big difference over time. $10 000 invested in the S&P 500 57 years ago is worth $2.9 million but $341 million in Berkshire Hathaway. Investing is a long-term game.
"Whatever our form of ownership, our goal is to have meaningful investments in businesses with both durable economic advantages and a first-class CEO." Warren Buffett mentions investing in great businesses with great management but that only a few of them will actually deliver outstanding returns with most delivering above-average returns.
Warren Buffett also talks about how much living in America has contributed to the success of Berkshire Hathaway and that the US Treasury is a silent shareholder collecting taxes.
Berkshire Hathaway now has $144 billion in cash as opportunities are still rare. But
they are buying back shares. Warren Buffett also talked about the four giants: Apple $AAPL , the insurance businesses, Berkshire Hathaway Energy, and BNSF.