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Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
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- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
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- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
'In Warren We Trust'
by Howard Haykin
5 Things We Learned from the Warren Buffett Annual Letter [Investopedia]
Investopedia studied this letter, and found five observations by Buffett that should be of particular interest to BRK shareholders and the general investing public.
Yes, Kraft Heinz’s troubles (sinking stock prices and big write-down), which accompanied the annual shareholder letter, was a major factor in Berkshire posting its lowest annual profit since 2001, many of Berkshire’s more than 90 businesses performed well. Buffett, in turn, touts the strength of the U.S. economy, while acknowledging that “Berkshire’s success has been in part a product of ‘the American tailwind’ that has enabled the country to enjoy ‘almost unbelievable prosperity’.”
The market value of Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) grew by 2.8% in 2018 and the conglomerate earned $4 billion, outpacing the S&P 500 but down substantially from the prior year’s 21.9% growth. Meanwhile, the 88-year-old CEO reiterated his wish to invest Berkshire’s year-end cash surplus of $112 billion in a company, while touting the younger execs who took over operations in 2018 - Ajit Jain (responsible for insurance business) and Greg Abel (oversees the rest).
Warren Buffett’s latest annual letter didn’t offer many clues to the timing or identity of his successor. But he did present his answers to a couple of the biggest questions that will face whoever takes his place.
What Warren Buffett is Leaving His Successors [Bloomberg]
Most of the letter is a discussion of how the conglomerate should be evaluated not as individual businesses but as a “forest” of investments arranged in large “groves” with complementary characteristics. Along the way, there are occasional digressions intended to illustrate how Berkshire’s approach differs from those of other corporations and investors — less comfortable with debt, more comfortable with big piles of cash, better at accounting, more long-term oriented.
Warren Buffett says he and Charlie Munger, Berkshire's vice chairman, don't view BRK’s holdings "as a collection of ticker symbols – a financial dalliance to be terminated because of downgrades by 'the Street,' expected Federal Reserve actions, possible political developments, forecasts by economists or whatever else might be the subject du jour." Rather, they see "an assembly of companies that we partly own and that, on a weighted basis, are earning about 20% on the net tangible equity capital required to run their businesses."