2011 Warren Buffet's Annual Letter
The 2011 annual letter from Warren Buffet to Berkshire Hathaway shareholders has been posted. As usual the letter is packed full of valuable investor insights and a bit of self-deprecating humor.
Here are some key takeaways for me from the letter:
- Buffet acknowledges that a housing recovery has not come about as he anticipated, but that housing starts are still below housing formations and the housing industry will recover sooner rather than later.
- Touched on the IBM investment, and share repurchasing. It strikes me that Warren is using the letter to remind the IBM execs to only use significant capital to repurchase shares if they can get them for a price that makes economic sense for shareholders.
- Last year Warren announced that Berkshire would repurchase shares at up to 110% of book value. He inidicated they were only in the market for a few days during 2011 and purchased $67million of stock. Looking at historical prices for Berkshire it looked to be at the end of September and perhaps August when the BRK-B stock price briefly flirted between $66-$68.
- Buffet made it clear he doesn't like currency based investments (ie bonds) in today's environment. "Current rates, however, do not come close to offsetting the purchasing-power risk that investors assume. Right now bonds should come with a warning label."
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