FACTBOX-Highlights of Warren Buffett's annual investors' letter

[Joanne98]

ON THE 2008 FINANCIAL CRISIS "As the year progressed, a series of life-threatening problems within many
of the world's great financial institutions was unveiled. This led to a
dysfunctional credit market that in important respects soon turned
nonfunctional. The watchword throughout the country became the creed I saw on
restaurant walls when I was young: "In God we trust; all others pay cash." THE CREDIT MELTDOWN "By the fourth quarter, the credit crisis, coupled with tumbling home and
stock prices, had produced a paralyzing fear that engulfed the country. A
freefall in business activity ensued, accelerating at a pace that I have never
before witnessed. The U.S. -- and much of the world -- became trapped in a
vicious negative-feedback cycle. Fear led to business contraction, and that in
turn led to even greater fear." 2009 OUTLOOK "Most of the Berkshire businesses whose results are significantly affected
by the economy earned below their potential last year, and that will be true in
2009 as well. Our retailers were hit particularly hard, as were our operations
tied to residential construction." MAKING MOVES IN THIS MARKET "During 2008 I did some dumb things in investments. I made at least one
major mistake of commission and several lesser ones that also hurt. I will tell
you more about these later. Furthermore, I made some errors of omission,
sucking my thumb when new facts came in that should have caused me to
re-examine my thinking and promptly take action. "Additionally, the market value of the bonds and stocks that we continue to
hold suffered a significant decline along with the general market. This does
not bother Charlie and me. Indeed, we enjoy such price declines if we have
funds available to increase our positions. Long ago, Ben Graham taught me that
'Price is what you pay; value is what you get.' "Whether we're talking about socks or stocks, I like buying quality
merchandise when it is marked down." IDENTIFYING ACQUISITIONS "Our long-avowed goal is to be the 'buyer of choice' for businesses --
particularly those built and owned by families. The way to achieve this goal is
to deserve it. That means we must keep our promises; avoid leveraging up
acquired businesses; grant unusual autonomy to our managers; and hold the
purchased companies through thick and thin (though we prefer thick and
thicker). "Our record matches our rhetoric. Most buyers competing against us,
however, follow a different path. "For them, acquisitions are 'merchandise.' Before the ink dries on their
purchase contracts, these operators are contemplating 'exit strategies.' We
have a decided advantage, therefore, when we encounter sellers who truly care
about the future of their businesses." GEICO "As we view GEICO's current opportunities, Tony (Nicely) and I feel like
two hungry mosquitoes in a nudist camp. Juicy targets are everywhere."

http://www.reuters.com/article/etfNews/idUSN2833768520090228