- Analysts at
- Follow Business Insider's coverage of the letter on Saturday
ADVERTISEMENT
Warren Buffett's big annual letter is coming — here are the most important things to look out for (BRKA, BRKB)
See what's most important to Wall Street in Buffett's annual letter.
Warren Buffett's letter to shareholders will be released on Saturday.
It's a highly anticipated document that analysts, shareholders, and fans of the Oracle of Omaha have studied every year since 1978. And once again, the Berkshire Hathaway CEO will share extensive thoughts on his company's business, America, financial markets, and perhaps a wildcard or two.
In a note on Friday, analysts at Morgan Stanley led by Kai Pan listed four things they'll be reading for.
ADVERTISEMENT
First is Buffett's succession plan. In January, Buffett promoted two senior executives — Greg Abel and Ajit Jain — to Berkshire's board of directors.
Abel was appointed as Berkshire’s vice chairman for non-insurance business operations, and Jain as vice chairman, insurance operations. Buffett described the appointments as "
The person Buffett chooses would undoubtedly have huge shoes to fill. Buffett's successor would need to quickly convince shareholders that Berkshire Hathaway will continue creating the kind of value they're accustomed to.
The second key thing to read Buffett's letter for is the impact of tax reform on Berkshire. Analysts at Barclays have estimated that the company’s book value could rise by about $37 billion.
Specifically, Pan is curious about how much of the company's tax benefits would be reinvested in the business and how much could be lost to regulations. Outside of Berkshire's business, Pan will be reading for any comments on the long-term impact of tax reform on inflation and the deficit.
ADVERTISEMENT
Third, Pan is interested to learn about how Berkshire plans to spend its cash pile, worth over $100 billion. "Capital deployment is crucial to BRK’s future earning growth," he said. "Unfortunately, rising equity valuations and strong competitions from PE funds make it a less ideal environment for potential acquisitions for BRK."
Lastly, Buffett may talk about the recently announced plans by Berkshire, JPMorgan, and Amazon to try and make healthcare more affordable for their employees.
As usual, Business Insider will be covering the letter on Saturday. You can recap the highlights of last year's letter here, and follow our coverage on Saturday here.
JOIN OUR PULSE COMMUNITY!
ADVERTISEMENT
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
ADVERTISEMENT