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Warren Buffett, CEO of famed conglomerate Berkshire Hathaway, published his annual letter to shareholders last weekend. It shows that the billionaire is unsure which companies to invest in at the moment. However, he has plenty of capital on hand. Berkshire sits on a cash mountain of nearly $170 billion.

In related news, Buffett released his letter to 3 million shareholders on Saturday along with the annual results.

  • The annual report reveals that Berkshire's operating profit rose 28 percent over last year to $8.5 billion.
  • Net profit more than doubled to 37.6 billion.
  • But perhaps most strikingly, the cash mountain of Buffett's megaholding was boosted by some $10 billion to $167.7 billion. And that's despite hefty share buybacks. Last year, for example, the conglomerate increased buybacks from $8 billion to $9.2 billion.

"No takeover targets right now"

Details: Why does Buffett have so much cash? The explanation is simple: there are too few interesting companies to take a stake in at the moment, according to the Oracle of Omaha.

  • The billionaire notes in his letter that Berkshire is a safe place for investors to park their money as long as they don't expect the "dazzling performance" of the past. "Right now there are no attractively priced acquisition targets large enough to make a significant difference in results," it sounds. But he adds that he stands ready to put capital to work as soon as opportunities arise.
  • He further notes in his letter that the markets have a much higher casino feel than when he was young. "Although the stock market is gigantically larger than it was in our early days, active participants are no more emotionally stable or better educated than when I was in school," Buffett said.

Charlie Munger

Also this: in a separate letter, Buffett also spoke highly of Charlie Munger, his right-hand man who died in November at the age of 99.

  • "Munger never took credit for his successful investments. I got to take all the accolades," Buffett said. "In a way, his relationship with me was part older brother, part loving father. Even when he knew he was right, he gave me the reins, and when I blundered, he never - never - reminded me of my mistake."
  • Buffett, too, realizes that his time will come one day. That is why he also spends time in his letter discussing his succession. As we know by now, Greg Abel, who is in charge of the non-insurance business, will follow in his footsteps. "He is ready in every way to become CEO of Berkshire," it sounds.
    • Abel will take Munger's place alongside Buffett on the podium at the May 4 general meeting.

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