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Words From Warren…
Posted by: | CommentsTo the Shareholders of Berkshire Hathaway Inc.:
Our gain in net worth during 2009 was $21.8 billion, which increased the per-share book value of both our Class A and Class B stock by 19.8%. Over the last 45 years (that is, since present management took over)book value has grown from $19 to $84,487, a rate of 20.3% compounded annually.*
Berkshire’s recent acquisition of Burlington Northern Santa Fe (BNSF) has added at least 65,000shareholders to the 500,000 or so already on our books. It’s important to Charlie Munger, my long-time partner,and me that all of our owners understand Berkshire’s operations, goals, limitations and culture. In each annual report, consequently, we restate the economic principles that guide us. This year these principles appear on pages89-94 and I urge all of you – but particularly our new shareholders – to read them. Berkshire has adhered to these principles for decades and will continue to do so long after I’m gone.In this letter we will also review some of the basics of our business, hoping to provide both a freshman orientation session for our BNSF newcomers and a refresher course for Berkshire veterans.
To download and read the entire annual report please click the link below:
Verizon Communication (VZ)
Posted by: | CommentsVerizon Communications
A friend of mine asked me if investing in Verizon communications (VZ) would be a prudent move. Instead of answering him directly I told him I would get back with him. I am going to tell him to check out this post. I am going to attempt to teach my friend how to fish instead of just giving him one. We are going to look at Verizon Communications (VZ) through the lens of the CAN SLIM investment strategy created by one of my favorites William O’Neal. 
CAN SLIM is an acronym for C= current earnings, A=annual earnings, N=new product/service or new management, S= Supply and Demand refers to trading volume,L= Leaders or Laggard, I= Institutional ownership (mutual fund, hedge fund or pension fund ownership) and the vitally important M= market direction. As of the writing of this the price of
Verizon Communications (VZ) is $28.93 their 52 week is range is $26.10-$34.13. Their current earnings per share last quarter were in line with consensus view of $.54 a share. Their annual earnings for 2009 $2.40 per share, which also met analyst consensus. There are currently no new products/services, no new management changes or new price changes.
Verizon’s daily average volume is 19,239,400 their volume is was 14,221,400 on Friday February 12th. Not a good sign. The top 5 companies in the telecom industry are cnsl, idtc, idt, ctl, and eght. None of these companies are setting the world on fire they are all laggards and not showing real strength. There are 5,622 large block institutional owners including State Street, Vanguard, Fidelty, Black Rock ,TIIA-CREF among others. Their turnover for the stock is low to moderate. The market is in a correction and has been for several weeks. At this time there is no catalyst to propel Verizon Communications (VZ) higher. According to the CAN SLIM investment strategy this stock would not be a buy. They do have a dividend of 6.6% but that is not a good enough reason to own the stock. If you own the stock I would buy puts to protect myself from falling prices or raise cash. If you must own telecom I would ask myself why and rule against it because the industry rank is currently 156. According to Investor’s Business Daily Verizon is 25th out of 38 stocks not a stock that would motivate me to buy. If you absolutely must own telecom buy one of the top 5 companies cnsl, idtc, idt, ctl, and eght. Otherwise I would find a better company in a more promising industry. At this time Verizon is not a buy.
Keathel H. Haynes III, Chief Investment Officer
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