graphic
Personal Finance > Investing
Berkshire's $15B war chest
March 13, 1999: 7:45 p.m. ET

Buffett seeks 'major' acquisition, but 'nothing's on the horizon'
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Billionaire investor Warren Buffett said in a letter released Saturday that his company wants to make "a really major business acquisition" to absorb some $15 billion of spare cash, but that he sees "nothing on the horizon."
     "Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's," Buffett wrote in his closely followed annual letter to shareholders of his Berkshire Hathaway Inc.
     "(Berkshire Vice Chairman Charles Munger) and I will continue our search for large equity investments or, better yet, a really major business acquisition that would absorb our liquid assets, " Buffett wrote.
     But he added: "Currently, however, we see nothing on the horizon."
     Wall Street carefully monitors Buffett's annual letter for market insights from the self-made billionaire -- who, despite being one of the world's richest people and among history's most-successful investors, rarely speaks publicly.
     In 1998, the Dow Jones industrial average rallied almost 2 percent in a single day to set a new record high after Wall Street interpreted comments in last year's Buffett annual letter as bullish.
     A year earlier, the Dow lost some 1 percent intraday when traders viewed Buffett's letter as bearish.
     Silver prices also rallied sharply last year after Berkshire disclosed that it had taken a major silver position.
     This year, Buffett dropped few similar bombshells, stating that Berkshire's 1998 silver announcement "deviated from my standard practice of not disclosing our investments (other than those we are legally required to report)."
     Buffett said he only made last year's disclosure due to unusual circumstances, such as the fact that "questions about our silver position that we had received from regulatory authorities led us to believe that they wished us to publicly acknowledge this investment."
     "Normally, however, we see no advantage in talking about specific investment actions," he wrote. "Therefore -- unless we again take a position that is particularly large -- we will not post you as to what we are doing in respect to any specific holding of an unconventional sort."
     Still, the billionaire did say: "We can report, however, that we have eliminated certain of the positions discussed last year and added certain others." He did not elaborate.
     "Our never-comment-even-if-untrue policy in regard to investments may disappoint 'piggybackers,' but will benefit owners," Buffett explained. "Your Berkshire shares would be worth less if we discussed what we are doing. Incidentally, we should warn you that media speculation about our investment moves continues in most cases to be incorrect. People who rely on such commentary do so at their own peril."
     Apparently heeding his own no-comment policy, Buffett this year skipped including any general-market commentary in his letter.
     Omaha, Neb.-based Berkshire Hathaway Inc. owns large stakes in Coca-Cola Co., Washington Post Co. and other corporations.
     The company's "A" class of stock -- which has never split -- is Wall Street's priciest issue, closing Friday at $80,300 a share, up $4,900.Back to top
     -- by staff writer Jerry Kronenberg

  RELATED STORIES

GEICO bolsters Berkshire - March 9, 1999

Buffett sees fewer bargains - March 14, 1998

  RELATED SITES

Berkshire Hathaway

Portfolio manager


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic