As is his tradition every year, at the end of February Warren Buffett released another of his highly anticipated Letters to Shareholders summarizing states of affairs in his investment vehicle Berkshire Hathaway. Needless to say that the information it contains are both entertaining and educational providing an insight into the genius’ investing mind.
Berkshire’s performance
Compared to 2005, the book value of the company rose by 18.4%, beating its benchmark, S&P 500 by 2.6%. This result makes for yearly after tax compounding rate of 21.4% since 1965 meaning that $100 dollars invested those days would today represent value of approximately $350,000.
Acquisitions
2006 saw Buffett’s first major venture overseas by acquiring 80% of Israeli toolmaker ISCAR for approximately $4 billion dollars. Apart from that company, at home he also finilized purchases of PacifiCorp, Business Wire and Applied Underwriters for the grand total of $6 billion.
Investments
One of the parts which I believe the regular investors find most amusing is the publicized list of Berkshire’s commons stock holdings.
This year however Buffett was a little bit more secretive not revealing the identity of two major holdings in total value of $1.9 billion. As he puts it:
We don’t itemize the two securities referred to, which have a market value of $1.9 billion, because we continue to buy them. I could, of course, tell you their names. But then I would have to kill you.
Of course great speculations arised as to the identity of the other two major holdings. According to latest news, one of the appears to be second largest US railroad Burlington Northern Santa Fe Corp.
The Annual Meeting
As pointed out in the Letter, this year’s “Woodstock for Capitalists” will be held on Saturday May 5 with all its regular attractions and activities. So if you are intending to attend this event in Omaha and still have not made you travel arrangement, better hurry!
Do you invest according to Buffett and his strategies? Are you planning visit to this year’s Annual Meeting? Let us know either in the comments or directly to our email dan@soundofgold.com.
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