By Scott Ronalds

Tom discussed Longleaf Partners’ annual letter to shareholders in a blog posting yesterday. Today, the grand-daddy of all shareholder letters is in the news – Warren Buffett’s. I’m beating Tom to the punch for a synopsis, as his posts in previous years have been a little ‘drawn-out’ (The Buffett Letter #1, The Buffett Letter #2, The Buffett Letter #3, The Buffett Letter #4). I promise to keep it tight.

This year’s letter to the shareholders of Berkshire Hathaway was released on the weekend. As usual, it’s getting plenty of attention in financial circles. Some of the noteworthy items being highlighted include Buffett’s:

• Bullish view on America (“The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective ... America’s best days lie ahead.”)
  
• Desire to make a big acquisition (“Our elephant gun has been reloaded, and my trigger finger is itchy.”)
  
• Confidence in a housing recovery (“A housing recovery will probably begin within a year or so. In any event, it is certain to occur at some point.”)

There are a few reminders of Buffett’s investment style that stand out:

“Fund consultants like to require style boxes such as “long-short,” “macro,” “international equities.” At Berkshire our only style box is ‘smart.’”

“At Berkshire we face no institutional restraints when we deploy capital. Charlie and I are limited only by our ability to understand the likely future of a possible acquisition.”

Buffett’s success in beating the market over the past 45 years has come from a long-term perspective (“At Berkshire, our time horizon is forever”), an independent viewpoint and an unconstrained approach.