Warren Buffett has understandably been considered one of the best investors of all time. Yearly, he writes a letter to his shareholders concerning his firm – Berkshire Hathaway, Inc. Our clients all own his company, as it is one of the largest companies in the U.S. and thus, is held in the Large Company U.S. allocation.
In this year’s letter, the “Oracle of Nebraska”, highlights his company ‘s yearly 2013 performance which performed well. His company is a collection of individual firms ranging from several large companies such as a railroad company (Burlington Northern Santa Fe Corp.) and large insurer (GEICO) to small companies such as See Candy and Brooks, a running shoe company.
Warren also discussed how optimistic he is concerning the United States economic future. He stated that while they invest across the globe he believes the greatest opportunity resides in the U.S.
America’s best days lie ahead.
His $115 billion stock portfolio is positioned to benefit across his businesses covering the energy, retail and insurance industries. The railroad business is benefiting from the surge in oil-drilling and the shipment of oil over the rails.
He does highlight his major domestic concern which has not been dealt with yet: the unfunded public pension plans across the U.S. He discusses the fact that public entities have promised pensions they will not be able to afford.
He predicts that
During the next decade, you will read a lot of news – bad news – about public pension plans.
Even with this warning, he spends the end of the letter discussing his wisdom of investing for the long term, warning his readers not to follow the market chatter and cautioned against buying and selling individual stocks. He stressed the need to be invested across broadly diversified asset classes.
Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important. (When I hear TV commentators glibly opine on what the market will do next, I am reminded of Mickey Mantle’s scathing comment: “You don’t know how easy this game is until you get into that broadcasting booth.”)
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