Buffett compared corporate deals to marriages
that can be either blissful or troubled. He said
Berkshire’s record is filled with more happy
deals than unpleasant ones, but he has recently
struggled to find acquisition targets to court.
Berkshire held roughly $128 billion in cash and
short-term investments at the year’s end because
Buffett hasn’t found any reasonably priced major
acquisitions in recent years. Berkshire is also
facing more competition for acquisitions from
private equity firms and other companies such as
privately held Koch Industries.
Buffett’s letter is always well-read in the business
world because of his remarkable track record,
his habit of dissecting the economy or other
topics, and his talent for explaining complicated
subjects in plain language. But in this year’s
letter, he mostly focused on Berkshire’s
businesses and reiterated messages he has
delivered before.
Investor Bill Smead said he thinks Buffett “pulled
his punches” in the letter and is resisting leveling
broad criticisms at this late stage of his career.
“Buffett is wisely stepping back. He will not
be the moral compass in the market going
forward,” said Smead, who leads Smead
Capital Management.
Edward Jones analyst Jim Shanahan said Buffett
kept this year’s letter focused on business and
didn’t venture into other topics the way he has
in the past.
“The annual letter has been getting shorter over
the years, and it has lost some of the humor
and wisdom that has made it so entertaining,”
Shanahan said.