Buffett opened the letter by acknowledging that he has occasionally made mistakes over the years without offering many specific examples, but he assured shareholders that the man he has chosen to one day succeed him as CEO, Greg Abel, isn’t one of them. He wrote that Abel will be ready to act whenever he spots significant investment opportunities.
“We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best deploy your (and my family’s) savings. Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities. Greg has vividly shown his ability to act at such times,” Buffett wrote.
And Abel will have plenty of resources to work with given that Berkshire now holds $334.201 billion cash after selling off much of its Apple and Bank of America stock in the past year and continuing to generate money from all its subsidiaries that include Geico insurance, BNSF railroad, a collection of major utilities and an assortment of major manufacturers and well-known retail businesses that include brands like Dairy Queen and See’s Candy. That’s almost double the $167.6 billion cash Berkshire held a year ago.
Buffett did find a few things to use some of that cash on last year by spending $3.9 billion to acquire the rest of its utility business from the estate of a former partner and another $2.6 billion to buy the rest of the Pilot truck stop chain. Buffett said he also increased Berkshire’s investment in five major Japanese conglomerates. Berkshire has now spent $13.8 billion over the past six years on those Japanese investments that are now worth $23.5 billion.
But while Buffett has struggled to find major acquisitions in recent years he affirmed that he has no plans to offer a dividend. In what might be a nod to the 94-year-old Buffett’s age, the legendary investor announced that this year’s shareholder meeting in May that routinely attracts tens of thousands of people will be shorter. Buffett and Berkshire’s two vice chairmen will only answer questions from 8 a.m. until 1 p.m. – several hours less than usual. Buffett also acknowledged using a cane these days to avoid “falling flat on my face.”
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