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Warren Buffett's 2009 annual letter to Berkshire Hathaway (BRK.A, BRK.B) shareholders is - as usual - a great read, full of both wit and important investment insight.

I think the most important part of his 2009 letter - by far - is this quote from the section on what Buffet and partner Charlie Munger "don't do:" [click to enlarge quotes]

That's great advice in this era of PBA's (
"Price-Blind Arguments," detailed in my 2010 outlook). Whether you're a pro or a novice in investing, we constantly hear people pontificating on "the future in alternative energy," or "the future in 4G networks," or "the future in cloud computing." Buffett's comments should remind us investors (especially us little ole' equity investors, first to be wiped out in a bankruptcy!) that many of these will indeed be huge, transformational industries and trends, but investment gains will be had only at the right price and with the right management.

Another interesting segment is Warren's discussion of Berkshire's Regulated Utility Business segment.
It should not be overlooked that Berkshire's newest prize - railroad operator Burlington Northern Santa Fe - is included in this business. That Berkshire put a decade's worth of acquisition ammo into a division that is regulated, and to a degree, dependent on the government, should be a warning to anyone expecting Berkshire to continue to double the equity market's performance.

Buffett goes on to discuss the tens of billions of dollars that Berkshire will put into businesses in which their acceptable rate of return is decided by the government. That is the biggest worry going forward for Berkshire investors, because it is so flagrantly un-Buffett.
The greatest capitalist in history is using the prodigious cash flow from his incredibly well-run insurance businesses to dump it into capital expenditures in regulated utilities. And then hope the government allows a decent return on that money.

What the heck, Warren?

Disclosure: no position

Source: Buffett's Curious Interest in Government-Dependent Businesses