Investing.com - Warren Buffett, the chairman of Berkshire Hathaway (NYSE:BRKa) (NYSE:BRKb), recently released his annual letter to shareholders, accompanied by the company’s 2023 earnings report. This year's letter is particularly poignant as it marks the first one since the passing of Buffett's long-standing investment partner, Charlie Munger, in late November 2023.
As with previous years, the 2023 shareholder letter largely focuses on offering investors valuable insights on successful investing. However, this year's letter also touches on questions regarding Berkshire's dividend policy, Buffett's successor, and the stocks he views as long-term holdings.
The letter starts with a heartfelt tribute to Munger, whom Buffett credits for steering him and Berkshire towards quality companies. Buffett fondly refers to Munger as the "architect" of the current Berkshire, with himself as the "general contractor" who executed Munger’s vision.
In the letter, Buffett also shares his views on investing, emphasizing the importance of having a clear purpose, focusing on quality investments, favoring companies run by good managers, holding investments for the long term, and practicing fiscal conservatism. He notes that today's market exhibits more "casino-like" behavior than in his early days and urges investors to remain patient and disciplined.
Buffett reaffirms his faith in Coca-Cola Co (NYSE:KO) and American Express Company (NYSE:AXP), stocks he expects Berkshire to hold indefinitely. This year, he adds Occidental Petroleum Corporation (NYSE:OXY) and stakes in five large Japanese financial conglomerates - Itochu Corp. (TYO:8001), Marubeni Corp. (TYO:8002), Mitsubishi UFJ Financial Group Inc (TYO:8306), Sumitomo Mitsui Financial (TYO:8316), and Sumitomo Mitsui Financial (TYO:8316)—to the list of long-term investments.
Addressing the question of whether Berkshire can continue to outperform at its current size, Buffett admits that the possibilities are limited. He suggests that investors should expect Berkshire to perform slightly better than the average company.