Warren Buffett released his annual shareholder letter on Saturday. I read it quickly, as part of my work on the updated, revised edition of my free e-book, Warren Buffett Predicts the Future (which you can download here.)
There were some compelling takeaways from the letter, including how Buffett embraced some of his biggest mistakes.
But with the benefit of a day or two of hindsight, I realize now that I missed something I'd been expecting to see--three somethings in fact--because Buffett never mentioned them. And the truth is, they're striking by their absence.
1. Um, the pandemic?
Buffett's letter runs 7,218 words, but as Katherine Chiglinsky of Bloomberg pointed out, there's barely a word about the biggest global development of the past year: the Covid-19 pandemic.
In fact, the term "COVID-19" appears only once, and then only as an afterthought, describing how one of Berkshire's subordinate companies, Nebraska Furniture Mart, set a sales record in 2020 ("despite ... closing ... for more than six weeks because of COVID-19.")
Beyond that: Pandemic? Coronavirus? Masks? Vaccines? Medicines? Pharma?
Not one of these words is mentioned. In fact, even when Buffett describes how Berkshire had to scrap its annual meeting and go all-virtual last year, and outlines plans to do so again this year (in Los Angeles, not Omaha), he manages to do so without ever mentioning the reason why the whole thing was upended to begin with.
Even more odd: Buffett barely mentions the pandemic even in the context of his big mea culpa in the letter, over an $11 billion write-down that Berkshire had to take as a result of the performance of Precision Castparts.
Precision Castparts makes equipment for aerospace and energy companies, and as Chiglinsky points out, a key reason why it underperformed last year was because of reduced demand during the pandemic.
But except for a short, glancing mention of "adverse developments throughout the aerospace industry, PCC's most important source of customers," that's it. Buffett doesn't bring it up.
2. The political climate?
Here's the next thing that doesn't come up: the U.S. political climate. Not that this is exactly what you'd hope the letter would be all about, but it's striking not to mention it at all--the 2020 presidential election, the racial justice protests that erupted all over the country during the past 12 months, and the January 6 insurrection at the U.S. Capitol.
Truly, I don't know what to make of the silence, even when it seems like it would be relevant. For example, there's nothing about the risks faced by insurers, or the context of Berkshire's 5.4 percent ownership of Apple -- say, "the coalition of state attorneys general, along with the U.S. Department of Justice," that were reportedly "taking the first steps toward launching an antitrust probe of Apple."
This is a bit of a change for Buffett, who has not been quiet on politics earlier in his career.
For example, in 2008 he endorsed Barack Obama for president and made contributions; that year he said he used the word "lobotomy" in explaining what it would take for him to be able to support Obama's Republican opponent, Senator John McCain.
Buffett endorsed Obama again in 2012, got behind Hillary Clinton in 2016, and criticized then-candidate Donald Trump for not releasing his tax returns. But this time--not just in the letter, mind you but for the whole year? Silence on politics.
It's worth pointing out that Buffett has a lot of perspective, politically speaking. As he said in 2017, he'd lived under 15 of the then-45 presidents (make that 16 out of 46 now), and had traded under every president since FDR.
"The first one was [President Herbert] Hoover," Buffett told CNBC in 2017. "I was only 2 when he left so I hadn't gotten active at that point. But Roosevelt was next. And I bought stocks under him, even though my dad thought it was the end of the world when he got elected."
A year ago, Buffett talked about a burning question at Berkshire: Who will take over when he and Charlie Munger are no longer able to run the company?
"Charlie and I long ago entered the urgent zone," Buffett acknowledged then, when he was 89 and Munger was 96. "That's not exactly great news for us. But Berkshire shareholders need not worry. Your company is 100 percent prepared for our departure."
Like you, me, and every other living soul, Buffett and Munger are now a year older.
As a result, Buffett said last year that he planned to give "more exposure" to the two most likely successors: Ajit Jain and Greg Abel, who run the insurance and non-insurance parts of Berkshire, respectively.
The plan was for them to join Buffett and Munger on stage at the annual meeting, but of course the meeting didn't exactly go according to plan. Neither Jain nor Munger was there.
Abel sat at the table next to Buffett in the auditorium, but he really didn't say very much.
Now, I wouldn't expect Buffett to repeat the whole thing verbatim from last year -- but really, the question of succession hardly came up in this year's letter, except for Buffett to promise that this year, all four will be on the dais in Los Angeles.
"Our other invaluable vice-chairmen, Ajit Jain and Greg Abel, will be with us to answer questions relating to their domains," he wrote.
Should we read anything into these omissions? I don't yet know. But now that I've stepped back and seen that they're not here, I can't stop not seeing them.