Link to: Paul Lountzis’ 2013 Annual Letter
Our 2013 year-end review is longer than usual because we felt it was important to discuss Berkshire Hathaway at length when Warren E. Buffett is no longer leading the company followed by our thoughts on several topics raised by our clients and we close by discussing our portfolio of holdings. We feel it is important for our clients to better understand our thinking and we try to include the information that we would want if our roles were reversed. Our letter consists of several parts.First, while we have shared our views on Berkshire Hathaway many times over the years, we have never gone into detail about Berkshire Hathaway’s future when Warren E. Buffett is no longer leading the company. Given that Berkshire Hathaway is our largest holding, we feel it is appropriate to share our views in some detail.
Second, we discuss some of our concerns regarding the stock market including segments on: overall stock market valuation levels, valuation levels for smaller companies, corporate profit margins, margin debt levels and the commoditization of businesses.
Third, is our discussion of several positive factors that bode well for long-term investors in stocks, despite current elevated market levels. These segments include: fewer companies listed on U.S. exchanges, pension funds, and the overall stock allocation of endowments.
Fourth, we discuss our views on several issues raised by our clients including the domestic energy revolution, housing, inflation/deflation and income and wealth inequality.
Finally, we discuss our portfolio activity including sections on preferred stocks, municipal bonds and stocks.
[H/T Beyond Proxy]