Full text of Warren Buffett's annual letter to shareholders

Warren Buffett released an extended version of his annual letter to shareholders in Berkshire Hathaway's annual report. Read the full text (pdf).

Buffett looks at the past, present and future of the company on the 50th anniversary of his takeover of Berkshire:

On May 6, 1964, Berkshire Hathaway, then run by a man named Seabury Stanton, sent a letter to its
shareholders offering to buy 225,000 shares of its stock for $11.375 per share. I had expected the letter; I was
surprised by the price.

Berkshire then had 1,583,680 shares outstanding. About 7% of these were owned by Buffett Partnership
Ltd. an investing entity that I managed and in which I had virtually all of my net worth. Shortly before the
tender offer was mailed, Stanton had asked me at what price BPL would sell its holdings. I answered $11.50, and he
said, "Fine, we have a deal." Then came Berkshire's letter, offering an eighth of a point less. I bristled at Stanton's
behavior and didn't tender.

That was a monumentally stupid decision.

It makes for some great weekend reading. Ahead of the report, there was speculation he could reveal his successor but the report said that person has been identified internally but not named.

"Both the board and I believe we now have the right person to succeed me as C.E.O. - a successor ready to assume the job the day after I die or step down," Buffett wrote.

The tone of the letter is optimistic about the opportunities for the company but he wrote that it will be difficult for Berkshire to outperform the average American company because of its enormous size.