During last weekend’s annual shareholder meeting Warren Buffett, CEO of Berkshire Hathaway Inc, made a comment many missed saying “Anyone that expects us to come close to replicating the past should sell their stock. It isn’t going to happen.”
Wait, a CEO telling his shareholders that the company he runs isn’t going to meet the expectations of years past? Even citing that ‘returns will decline‘?
Exactly.
Berkshire Hathaway Inc. (NYSE: BRK.A - BRK.B) has done phenomenally well with growth of 21.1 percent a year up until 2007. Such growth for a company with a market value over two hundred billion can not last forever as leaders are aging and talk of succession plans are coming to the forefront.
Berkshire Hathaway is one of many companies being thrown in the value/long-term stock pile, where holding it over several years is the most reasonable way to make an intelligent investment. Many of the investment plays inside of Berkshire are only going to be profitable in the long term such as junk bonds and stock market indexes. This will require a patient and steadfast investor willing to weather some bump roads ahead.
Warren Buffet isn’t going to sit idle either; he plans to continue to look for more businesses to acquire and keep accumulating cash to drive a company that is bigger and more wealthier then it was yesterday.
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