Saturday is almost like a religious holiday in the investment world.
Warren Buffet, the Oracle of Omaha, legendary investor and CEO of Berkshire Hathaway distributed his annual letter to Berkshire Hathaway shareholders, and a lot of people stopped what they were doing to absorb every word.
He’s been doing it for six decades now, sharing the highlights of the past year and giving a sort of ‘state of address,’ and the 90-year old icon made it clear that despite the challenges from the coronavirus pandemic, he’s never believed in the American dream more.
“In its brief 232 years of existence … there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America.”
“Success stories abound throughout America,” Buffett said. “Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.”
On top of the pep talk, he delivered some interesting financial news, and made it clear he’s not a fan of the bond market. “Bonds are not the place to be these days. Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.”
Berkshire Hathaway wholly owns two American businesses, a railroad (BNSF Railway) and energy company, Berkshire Hathaway Energy (BHE). together those two entities earned $8.3 billion in 2020.
“Your railroad carries about 15% of all non-local ton-miles (a ton of freight moved one mile) of goods that move in the United States, whether by rail, truck, pipeline, barge or aircraft,” Buffett said. “The history of American railroads is fascinating. After 150 years or so of frenzied construction, skullduggery, overbuilding, bankruptcies, reorganizations and mergers, the railroad industry finally emerged a few decades ago as mature and rationalized.”
For the first time ever, Buffet announced he will not be holding his annual shareholders meeting in Omaha. It will instead take place in Los Angeles, where Buffett’s Vice Chairman Charlie Munger lives.