Warren Buffett Talks Bad News In Annual Berkshire Hathaway Letter

Warren Buffett’s bad news was coated with a sense of optimism on Friday when he released his annual letter about Berkshire Hathaway.

Berkshire’s chairman and CEO did have bad news regarding the company’s percent profit jump, though his letter had more good news than bad to share.

Buffett’s letter also spoke about hos the company agreed to work with a 3G Capital investment fund to purchase H.J. Heinz for $23.3 billion.

He stated, however, that his business partner, Charlie Munger, wouldn’t be too happy with the ketchup deal, reports The Denver Post. Buffett explained, however:

“We still have plenty of cash and are generating more at a good clip. So it’s back to work; Charlie and I have again donned our safari outfits and resumed our search for elephants.”

Berkshire Hathaway’s net income soared in 2012 from $10.3 billion to $14.8 billion. The Wall Street Journal notes that there are several highlights that can be pulled from Warren Buffett’s letter.

Buffett gave advice to his fellow CEOs. He encouraged them to keep investing in America, explaining that Berkshire will continue to do the same. He stated:

“We will keep our foot to the floor and will almost certainly set still another record for capital expenditures in 2013. Opportunities abound in America.”

He also complimented his lieutenants, including Tony Nicely, Ajit Jain, Todd Combs, and Ted Weschler. Combs and Weschler are hedge fund managers who manage portfolios worth roughly $5 billion. Warren Buffett wrote of the two:

“Todd Combs and Ted Weschler, our new investment managers, have proved to be smart, models of integrity, helpful to Berkshire in many ways beyond portfolio management, and a perfect cultural fit. We hit the jackpot with these two.”

Berkshire Hathaway’s book value per share failed to outpace the S&P 500 in 2012 for just the ninth time in the past 48 years. The company’s bad news about its book value did not appear to outpace Berkshire Hathaway’s good news, according to the letter.

Warren Buffett’s full annual letter can be read here.