Warren Buffett's letters to Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) shareholders are among the most anticipated pieces of financial writing every year, and the latest edition will be released tomorrow. While there are some parts of the letter than contain information we already know -- such as Berkshire's track record of performance and a list of its largest stock holdings -- here are three things I'm especially curious to read about.
How does Buffett really feel about the Trump presidency?
Warren Buffett was an outspoken Hillary Clinton supporter during the presidential campaign, yet the Trump presidency is expected to benefit several of Berkshire's major businesses, such as insurance, and Berkshire's stock has risen by nearly 18% since the election. And with the market at record highs and lots of political uncertainty, many investors are on edge.
Therefore, I'm expecting Buffett to try and put investors' minds at ease and discuss his thoughts on the Trump presidency.
Before the election, Buffett made it clear that he thought Berkshire would do just fine no matter who was in the White House. "America works...I've said this before, it'll work wonderfully under Hillary Clinton, and I think it'll work fine under Donald Trump", Buffett said in a CNBC interview after the election.
In last year's letter to shareholders, at a time when there were still more than a dozen presidential candidates, Buffett advised investors that "For 240 year's it's been a terrible mistake to bet against America, and now is no time to start." In reference to Berkshire specifically, Buffett pointed out during last year's annual meeting how the company's strategy has worked in some pretty extreme political and economic climates over the years.
Now that the election is over, I'm especially curious as to Buffett's thoughts about the Trump presidency and the market's record highs, beyond the tidbits he's already shared with the media.
What investing wisdom will Buffett share?
Generally, the primary reason people look forward to Buffett's letters is to see what nuggets of investment wisdom he'll decide to share.
While there is an investment topic or two discussed in every letter, here are a few from recent years that are certainly worth a read for any long-term investor:
- Buffett's 2009 discussion of what Berkshire doesn't do -- such as avoiding businesses that are tough to evaluate. (Starts on page 3)
- Buffett's 2010 discussion of debt, and the importance of keeping adequate cash on hand. (Starts on page 22)
- Buffett's 2011 discussion of the three different types of investments, and why Buffett prefers to invest in assets like businesses and real estate instead of things like gold and bonds. (Starts on page 17)
- Buffett's 2012 discussion of dividends, and why Berkshire doesn't pay one. (Starts on page 18)
- The 2013 letter included an excellent discussion about some of Buffett's past little-known investments, and the investing lessons we can learn from them. (Starts on page 17)
- In 2014, Buffett discussed why stock investing is only appropriate for those with a long time horizon. (Starts on page 17)
Details of this year's annual meeting
Unlike most companies' annual meetings, Berkshire's is a big deal. Known as the "Woodstock of capitalism," Berkshire Hathaway's annual meeting consists of a series of events over an entire weekend, and typically fills the CenturyLink Center in Omaha and then some, which has a capacity of 17,560 people. If you're unfamiliar with what goes on at Berkshire annual meetings, here's the quick guide I wrote about last year's.
We already know that Berkshire's 2017 meeting will be held the weekend of May 6, 2017, and Berkshire has released a general outline of the events.
However, Buffett generally includes a fairly lengthy, and detailed, preview of the annual meeting in his letters. Last year's discussion (begins on page 26) took up about four pages, and includes details about what to expect, such as new events, opportunities for discount shopping with Berkshire's various brands, how to obtain meeting credentials, and how to submit a question for Warren Buffett or Charlie Munger to be asked during the meeting.