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 This year, his 50th at Berkshire's helm, the world's third-richest
person could write something quite different.
When Buffett releases this year's letter on Saturday, he may point
to opportunities outside of the United States, after he recently
decided to buy a German motorcycle accessories retailer and said he
may shop more in that country.
That would mark a significant turn for Berkshire, a conglomerate
with more than 80 businesses, giant stock investments and a $360
billion market value.
Buffett did not return a request for comment.
In his letter, eagerly awaited on Wall Street for Buffett's candid
thoughts on investing, business and life, the 84-year-old Buffett
may detail his vision for Berkshire in the decades to come,
including after he is gone.
His comparatively taciturn second-in-command, 91-year-old Charlie
Munger, is also expected to express his thoughts.
"Warren Buffett recognizes that global investing is going to be an
important part of the future," said Michael Yoshikami, chief
executive of Destination Wealth Management in Walnut Creek,
California and a longtime Berkshire shareholder.
Buffett's strategy of buying solid companies at low prices has
gotten more difficult in the United States. In the first quarter of
2009, when the S&P 500 index was barely one-third of what it is now,
stocks on average cost 12.9 times projected full-year earnings.
At the end of 2014, that multiple had reached 17.4, above the
long-term average of 14.8 times earnings, meaning it costs more to
get the same financial pop.
By contrast, the rest of the world's growth has been sluggish.
Germany is expected to grow just 1.3 percent this year, while the
U.S. economy may expand 3.6 percent, according to the International
Monetary Fund.
Though Buffett said this week the falling euro was not his primary
driver for buying in Europe, it was a factor. The currency has slid
about 20 percent against the U.S. dollar since May.
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DOLLARS FOR DOUGHNUTS
In the last year, Berkshire has announced several purchases worth or
estimated at a couple of billion dollars each.
These have included Procter & Gamble Co's Duracell battery unit, the
Van Tuyl auto retailer, and SNC-Lavalin Group Inc's AltaLink energy
transmission unit in Canada.
Buffett also kicked in $3 billion toward Burger King's purchase of
Canadian doughnut chain Tim Hortons, which created Restaurant Brands
International Inc.
Burger King is run by Brazil's 3G Capital, which shares ownership
with Berkshire of ketchup maker HJ Heinz Co.
Berkshire ended September with $62 billion in cash, well above the
$20 billion cash cushion Buffett likes. That leaves more than $40
billion to go shopping.
That means Buffett needs big purchases, which he calls "elephants,"
to soak up significant amounts of money. He has said he would team
up again with a partner such as 3G Capital.
"There may be opportunities overseas that he would certainly
consider," said Cathy Seifert, an analyst with S&P Capital IQ.
But even if Berkshire spreads its wings geographically, Seifert
said, it will not turn its back on a good U.S. purchase.
"I definitely would not rule out the U.S.," she said.
(Additional reporting by Caroline Valetkevitch; Editing by Jennifer
Ablan and Steve Orlofsky)
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