Warren Buffett’s annual letter to Berkshire Hathaway shareholders has been a must-read for investors for decades.

Courtesy of Whitney Tilson, founder and CEO of Empire Financial Research, here are the hi-lights from this year’s letter.


Regarding Berkshire’s almost unimaginable size


  • Many people perceive Berkshire as a large and somewhat strange collection of financial assets.


  • In truth, Berkshire owns and operates more U.S.-based ‘infrastructure’ assets – classified on our balance sheet as property, plant and equipment – than are owned and operated by any other American corporation.


  • That supremacy has never been our goal. It has, however, become a fact.


At year-end, those domestic infrastructure assets were carried on Berkshire’s balance sheet at $158 billion.


  • In 2021, for example, we paid $3.3 billion while the U.S. Treasury reported total corporate income-tax receipts of $402 billion.


  • Berkshire’s balance sheet includes $144 billion of cash and cash equivalents (excluding the holdings of Burlington Northern Sante Fe and Berkshire Hathaway Energy).


  • Of this sum, $120 billion is held in U.S. Treasury bills, all maturing in less than a year.


  • That stake leaves Berkshire financing about one half of 1% of the publicly-held national debt.


How he thinks about stocks

We own stocks based upon our expectations about their long-term business performance and not because we view them as vehicles for timely market moves.


That point is crucial: Charlie [Munger] and I are not stock-pickers; we are business-pickers.


On phony accounting


  • Deceptive ‘adjustments’ to earnings – to use a polite description – have become both more frequent and more fanciful as stocks have risen.


  • Speaking less politely, I would say that bull markets breed bloviated bull…


On the benefits of teaching

Teaching, like writing, has helped me develop and clarify my own thoughts.


Charlie calls this phenomenon the Orangutan effect: If you sit down with an Orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will yourself exit thinking more clearly.


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