What to expect from Warren Buffett's annual shareholder letter this year

By Warren BuffettFOXBusiness

Stocks Warren Buffett should invest in

Gradient Investments senior portfolio manager Mariann Montagne highlights three top stocks Berkshire Hathaway CEO Warren Buffett should buy.

Warren Buffett will release his widely anticipated annual letter to Berkshire Hathaway shareholders on Saturday, the same day that the sprawling conglomerate will report its quarterly earnings.

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In the letter, Buffett typically offers insight into general operations at Berkshire; general wisdom and business advice; and stock purchases he made over the year -- which is perhaps what investors are most eager to see.

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This year, the billionaire investor is once again expected to have not made any significant purchases with his $116 billion pile of cash. Last year, Buffett said that despite holding “far beyond” the level of cash they prefer, he and Vice Chairman Charlie Munger did not make any big acquisitions because the asking prices were too high.

TickerSecurityLastChange%Chg
BRK.ABERKSHIRE HATHAWAY INC.301,225.00-5,895.00-1.92%

“Why the purchasing frenzy?” Buffett wrote at the time. “In part, it’s because the CEO job self-selects for ‘can-do’ types. If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life.”

Berkshire’s financial reach extends to almost every sector of the economy, and it owns a number of marketable, blue chip-stocks that are valued at $170 billion (excluding the company’s shares of Kraft Heinz). Some of those stocks include Apple, Coca-Cola, Goldman Sachs, Southwest Airlines, American Express and General Motors.

The Omaha, Nebraska-based company also has earning power concentrated in the insurance business and will likely disclose the financial effect of several hurricanes on the sector. Last year, Buffett revealed its insurance business lost an estimated $3 billion after three hurricanes hit Texas, Florida and Puerto Rico in September.

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Buffett may also write about his health care venture with JPMorgan Chase CEO Jamie Dimon and Amazon CEO Jeff Bezos, which was first announced last year. The new company will focus on technological solutions that can provide affordable health care for employees.

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