Buffett says he is looking for acquisitions
Source: Agencies |
February 27, 2011, Sunday
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WARREN Buffett is looking for acquisitions as an outlet to deploy his US$38 billion cash pile, the legendary investor said in his annual letter to Berkshire Hathaway Inc shareholders yesterday.
Buffett also gave an aggressive earnings forecast for Berkshire's collection of businesses, said the company would engage in record capital spending and forecast a recovery in the housing market would start within a year.
Buffett acknowledged the need for Berkshire to expand to grow earnings at its non-insurance businesses, a broad collection that most prominently includes the railroad Burlington Northern and the electric utility MidAmerican.
"Our elephant gun has been reloaded, and my trigger finger is itchy," Buffett said. The letter was released just before 8am yesterday, as it is in most years - and many large investors say they get up early that day to read it the moment it comes online.
Buffett said Berkshire will need "more major acquisitions" to meet its goal.
One long-time Berkshire investor described the letter as "punchy" and "confidently American," among other things.
'Upbeat letter'
"I would say as an investor, I think it's a very upbeat letter, it's one that celebrates his courage on behalf of investors of going into the marketplace when the world was most fearful," said Tom Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, who is one of the 15 largest holders of Berkshire Class A shares.
Buffett also addressed the hot-button succession issue in the 26-page letter, something investors had anticipated given his age, 80, and the lack of a clear replacement.
Investment manager Todd Combs, hired late last year, will manage an initial portfolio of US$1 billion to US$3 billion, Buffett said, and Berkshire may add another one or two managers over time alongside him.
But Buffett said he will continue to manage the bulk of the portfolio while he is CEO. Berkshire's equity holdings topped US$52 billion at year-end.
Buffett was less bullish on interest rates, which have been low enough to earn the company a "pittance" on its cash in recent times. Buffett said rates will eventually rise, but it was "unlikely to come soon."
Buffett also gave an aggressive earnings forecast for Berkshire's collection of businesses, said the company would engage in record capital spending and forecast a recovery in the housing market would start within a year.
Buffett acknowledged the need for Berkshire to expand to grow earnings at its non-insurance businesses, a broad collection that most prominently includes the railroad Burlington Northern and the electric utility MidAmerican.
"Our elephant gun has been reloaded, and my trigger finger is itchy," Buffett said. The letter was released just before 8am yesterday, as it is in most years - and many large investors say they get up early that day to read it the moment it comes online.
Buffett said Berkshire will need "more major acquisitions" to meet its goal.
One long-time Berkshire investor described the letter as "punchy" and "confidently American," among other things.
'Upbeat letter'
"I would say as an investor, I think it's a very upbeat letter, it's one that celebrates his courage on behalf of investors of going into the marketplace when the world was most fearful," said Tom Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, who is one of the 15 largest holders of Berkshire Class A shares.
Buffett also addressed the hot-button succession issue in the 26-page letter, something investors had anticipated given his age, 80, and the lack of a clear replacement.
Investment manager Todd Combs, hired late last year, will manage an initial portfolio of US$1 billion to US$3 billion, Buffett said, and Berkshire may add another one or two managers over time alongside him.
But Buffett said he will continue to manage the bulk of the portfolio while he is CEO. Berkshire's equity holdings topped US$52 billion at year-end.
Buffett was less bullish on interest rates, which have been low enough to earn the company a "pittance" on its cash in recent times. Buffett said rates will eventually rise, but it was "unlikely to come soon."
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