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What we want to hear from Warren Buffett's annual letter on Saturday
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Loading...On Saturday, Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett is expected to publish his latest letter to shareholders.
The letter is one of the most widely-read pieces of investing wisdom published each year.
A few themes, of course, are likely to come up: Berkshire Hathaway’s recent purchases of Apple and airline stocks, the election of Donald Trump, and this year’s scandal at Wells Fargo.
But there are two other themes we think Buffett might hit on that are likely to make waves: the future of America and the future of the stock market.
In last year’s letter to shareholders, Buffett wrote that, “It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do. That view is dead wrong: The babies being born in America today are the luckiest crop in history.”
This theme, which has been echoed by business leaders like Jamie Dimon since it this was published, should be re-visited by Buffett following the election of Donald Trump as president. Buffett, who himself was a vocal supporter of Hillary Clinton, said after the election that the US economy will, ultimately, be fine under Donald Trump because it has the “secret sauce.”
As for the stock market, Buffett is no fan of predictions about the stock market and where the markets will or will not go in the future. Buffett will not be making a market call.
But in the past, Buffett has commented on stock prices in general, writing in his 1999 letter to shareholders that, “Our reservations about the prices of securities we own apply also to the general level of equity prices. We have never attempted to forecast what the stock market is going to do in the next month or the next year, and we are not trying to do that now. But…equity investors currently seem wildly optimistic in their expectations about future returns.”
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