Letters to Investors by Warren Buffet

The much awaited 'Letter by Warren Buffett to Shareholders' is out. Such letters are famous for its education content and insights:

Some of the highlights of 2014 Letter are: 

• Whilst many equity managers found it impossible to outperform the S&P 500, the two portfolio managers of the Berkshire Hathaway (Todd Combs and Ted Weschler) out performed S&P 500. Each manages a portfolio exceeding $7 billion. 
• Berkshire Hathaway increased its ownership interest in the following companies

- American Express, 
- Coca-Cola 
- Wells Fargo- (increased ownership to 9.2% versus 8.7% at yearend 2012)

- IBM (6.3% versus 6.0%)

Stock repurchases at Coca-Cola and American Express raised their % ownership

• Berkshire book value per share gained 18.2% in 2013, underperforming S&P 500 by 14.2%. Berkshire’s gain in net worth during 2013 was $34.2 billion. 
• Over the last 49 years (that is, since present management took over), book value has grown from $19 to $134,973, a rate of 19.7% compounded annually.
• The letter says that Berkshire’s intrinsic value far exceeds its book value. They repurchase of shares at 120% of book value . However, they did not purchase shares during 2013, however, because the stock price did not descend to the 120% level. If it does, we will be aggressive.
• They made two large acquisitions during 2013, spending almost $18 billion to purchase all of NV Energy and a major interest in H. J. Heinz.