Warren Buffett's Annual Letter 2010: Key Takeaways ~ market folly

Monday, February 28, 2011

Warren Buffett's Annual Letter 2010: Key Takeaways

Warren Buffett is out with his 2010 annual letter to Berkshire Hathaway (BRK.A / BRK.B) shareholders. The media has quickly pounced on one key sentence in the letter where he writes, "Our elephant gun has been reloaded, and my trigger finger is itchy." This has spurred a tsunami of speculation as to what company he might buy next. While this is notable language, we also wanted to highlight some of the takeaways from Buffett's letter as noted by fund managers:

- Buffett thinks a housing recovery could begin within the next year or so. In addition to unemployment, housing is one of the key pieces to fully solving the economic puzzle.

- Since we track fund manager holdings on the site, readers will be intrigued to know that you can buy shares at the same level (or even below) what Buffett paid for them in Conoco Phillips (COP), Kraft (KFT), Sanofi Aventis (SNY), and Munich RE. You can view the rest of Buffett's investments in our newsletter.

- While Buffett has been optimistic about the US for a while now, his enthusiasm is as strong as ever.

- Buffett stood by his mantra of 'buying when there's blood in the streets' during the financial crisis and the results showcase why this is a prudent strategy. He spent around $15 billion after Lehman Brothers failed and those investments are now paying off.

Turning back to Buffett's mention of potential acquisitions, you'll recall that Berkshire bought Burlington Northern Santa Fe as it acquired the entire railroad operator after owning a partial stake. He has made it clear that Berkshire needs more major acquisitions like this.

Some investors have argued that Buffett will have to look at private companies for acquisitions due to Berkshire's behemoth size. Will he pursue a public company he already owns a stake in? A public company he has yet to purchase shares of? A private company? Let us know your thoughts in the comments. For Warren Buffett's 2010 annual letter, you can download a .pdf copy here.

For more great resources on one of the greatest investors of our time, check out:

- Warren Buffett's recommended reading list
- Great investing advice via the top 25 Warren Buffett quotes
- Buffett's worst trade
- Compilation of Buffett's partnership letters
- A multi-decade look at Buffett's career

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