ValueInvest.Wiki
← Back to Letters

2009 Shareholder Letter

Buffett's 2009 letter discusses the BNSF acquisition, explains Berkshire's 'normal earning power' of $17 billion, and defends American resilience during the financial crisis.

buffettberkshire2009BNSFcrisisannual-letter

2009 Shareholder Letter

Date: February 26, 2010 Author: Warren Buffett Company: Berkshire Hathaway

Overview

2009 net worth increased $21.8 billion or 19.8% (S&P 26.5%), with per-share book value reaching $84,487 — a 20.3% compound annual return over 45 years.

Key Points

BNSF Acquisition

Burlington Northern Santa Fe acquisition:

  • Increased "normal" earning power by nearly 40% pre-tax
  • Added 65,000 new shareholders
  • BNSF moves freight 500 miles per gallon of diesel — 3x more efficient than trucking

Berkshire's "Normal" Earning Power

Current assets generate approximately:

  • $17 billion pre-tax
  • $12 billion after-tax (excluding capital gains/losses)

Investment in America

2010 capital spending: $6 billion (90% in USA) 2011 planned: $8 billion (all in USA)

"Over time, the movement of goods in the United States will increase, and BNSF should get its full share of the gain."

Against Short-Term Pessimism

"Our checks will clear."

Despite widespread pessimism, Berkshire continues investing heavily in the U.S.

Famous Quotes

"Every day Charlie and I think about how we can build on this base."

Related