Warren Buffett. Photo: Daniel Zuchnik/WireImage

Warren Buffett released his annual letter to Berkshire Hathaway shareholders on Saturday morning, sharing investment reflections and eyeing the future of the Omaha, Nebraska-based holding company and the market at large.

Details, via Axios' Courtenay Brown: Buffett turns 90 this year, though there’s no indication he plans to step aside, there is speculation about Buffett’s successor. Berkshire also notably exited the newspaper business last month.

What he's saying:

  • Berkshire earned $81.4 billion in 2019, according to generally accepted accounting principles, but Buffett urged his investors to "focus on operating earnings — which are little changed in 2019 — and to ignore both quarterly and annual gains or losses from investments, whether these are realized or unrealized."
  • "Forecasting interest rates has never been our game, and Charlie [Munger] and I have no idea what rates will average over the next year, or 10 or 30 years... the pundits who opine on thees subjects reveal, by that very behavior, far more about themselves than they reveal about the future."
  • "55 years ago, when Berkshire entered its current incarnation, the company paid nothing in federal income tax ... In most future years, we both hope and expect to send far larger sums to the Treasury."
  • The "Oracle of Omaha" offered a note of caution: “Anything can happen to stock prices tomorrow," adding, “there will be major drops in the market, perhaps of 50% magnitude or even greater.”
  • Buffett addressed concerns about his age: "Today, my will specifically directs its executors — as well as the trustees who will succeed them in administering my estate after the will is closed — not to sell any Berkshire shares. My will also absolves the executors and trustees from liability for maintaining what obviously will be an extreme concentration of assets."
  • "...Berkshire shareholders need not worry: Your company is 100% prepared for our departure," he said of he and 96-year-old Berkshire Hathaway vice chairman Charlier Munger.

Worth noting: Berkshire Hathaway, having loosened its stock repurchase policy, spent a record $2.2 billion on buybacks in the final three months of 2019, Bloomberg reports.

  • Buffett has no plans to slow down the buybacks.
  • "Shareholders having at least $20 million in value of A or B shares and an inclination to sell shares to Berkshire may wish to have their broker contact Berkshire's Mark Millard," Buffett wrote in his letter.
  • Even with the repurchases, Berkshire's cash pile sat at roughly $128 billion at the end of 2019.

Read the full letter:

Go deeper: Warren Buffett says the wealthy are "definitely undertaxed"

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