Berkshire Hathaway 2010 Annual Report Download - page 26

We keep our cash largely in U.S. Treasury bills and avoid other short-term securities yielding a few
more basis points, a policy we adhered to long before the frailties of commercial paper and money market funds
became apparent in September 2008. We agree with investment writer Ray DeVoe’s observation, “More money
has been lost reaching for yield than at the point of a gun.” At Berkshire, we don’t rely on bank lines, and we
don’t enter into contracts that could require postings of collateral except for amounts that are tiny in relation to
our liquid assets.
Furthermore, not a dime of cash has left Berkshire for dividends or share repurchases during the past
40 years. Instead, we have retained all of our earnings to strengthen our business, a reinforcement now running
about $1 billion per month. Our net worth has thus increased from $48 million to $157 billion during those four
decades and our intrinsic value has grown far more. No other American corporation has come close to building
up its financial strength in this unrelenting way.
By being so cautious in respect to leverage, we penalize our returns by a minor amount. Having loads of
liquidity, though, lets us sleep well. Moreover, during the episodes of financial chaos that occasionally erupt in our
economy, we will be equipped both financially and emotionally to play offense while others scramble for survival.
That’s what allowed us to invest $15.6 billion in 25 days of panic following the Lehman bankruptcy in 2008.
The Annual Meeting
The annual meeting will be held on Saturday, April 30th. Carrie Kizer from our home office will be the
ringmaster, and her theme this year is Planes, Trains and Automobiles. This gives NetJets, BNSF and BYD a
chance to show off.
As always, the doors will open at the Qwest Center at 7 a.m., and a new Berkshire movie will be shown at
8:30. At 9:30 we will go directly to the question-and-answer period, which (with a break for lunch at the Qwest’s
stands) will last until 3:30. After a short recess, Charlie and I will convene the annual meeting at 3:45. If you decide
to leave during the day’s question periods, please do so while Charlie is talking. (Act fast; he can be terse.)
The best reason to exit, of course, is to shop. We will help you do that by filling the 194,300-square-
foot hall that adjoins the meeting area with products from dozens of Berkshire subsidiaries. Last year, you did
your part, and most locations racked up record sales. In a nine-hour period, we sold 1,053 pairs of Justin boots,
12,416 pounds of See’s candy, 8,000 Dairy Queen Blizzards®and 8,800 Quikut knives (that’s 16 knives per
minute). But you can do better. Remember: Anyone who says money can’t buy happiness simply hasn’t learned
where to shop.
GEICO will have a booth staffed by a number of its top counselors from around the country, all of
them ready to supply you with auto insurance quotes. In most cases, GEICO will be able to give you a
shareholder discount (usually 8%). This special offer is permitted by 44 of the 51 jurisdictions in which we
operate. (One supplemental point: The discount is not additive if you qualify for another, such as that given
certain groups.) Bring the details of your existing insurance and check out whether we can save you money. For
at least half of you, I believe we can.
Be sure to visit the Bookworm. It will carry more than 60 books and DVDs, including the Chinese
language edition of Poor Charlie’s Almanack, the ever-popular book about my partner. So what if you can’t read
Chinese? Just buy a copy and carry it around; it will make you look urbane and erudite. Should you need to ship
your book purchases, a shipping service will be available nearby.
If you are a big spender – or merely a gawker – visit Elliott Aviation on the east side of the Omaha
airport between noon and 5:00 p.m. on Saturday. There we will have a fleet of NetJets aircraft that will get your
pulse racing. Come by bus; leave by private jet.
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