INVESTING

New Buffett Just Dropped

Before there was Roaring Kitty, there was Warren Buffett. On Saturday, the 90-year-old business icon dropped financials for his company, Berkshire Hathaway, and his highly anticipated annual letter to shareholders. 

Let’s start with Berkshire Hathaway performance 

Berkshire is a conglomerate that wholly owns firms in industries such as insurance, railroads, and retail. It also owns minority stakes in Corporate America’s finest—Apple, Coca-Cola, Bank of America, and others. 

Berkshire reported net income of $35.8 billion for the fourth quarter, which reflects the booming pandemic-era stock market. Berkshire also bought back almost $25 billion of its own stock last year, reducing the total number of outstanding shares and increasing current investors’ ownership. 

Big picture: Buffett’s stock market bets are flying high—after all, he owns more than 5% of a $2 trillion company (Apple). But he hasn't struck a really big deal recently, despite all the momentum for IPOs and SPACs on Wall Street. That’s left Buffett with a huge cash pile he’s increasingly using for stock buybacks.

Now to the letter

While Berkshire’s numbers are one thing, Buffett’s annual letter, in which the investor shares his folksy opinions on the business world, is the real highlight. Here are the main themes he touched on this year.

• Bonds are not the place to be: “Fixed-income investors worldwide—whether pension funds, insurance companies, or retirees—face a bleak future.”
• My bad: Buffett admitted he paid too much for the manufacturer Precision Castparts.
• USA, USA, USA: Buffett’s ever-optimistic about the future of the country. “There has been no incubator for unleashing human potential like America.” 

But notice what isn’t there: the pandemic, racial justice protests, the election, GameStop, and crypto. Buffett steered clear of these supercharged topics, which disappointed some observers. 

Looking ahead...Berkshire Hathaway is making a big change this year, moving its annual shareholder meeting in May from Omaha, NE, to Los Angeles, where Buffett’s 97-year-old BFF and longtime business partner Charlie Munger lives.

COVID-19

Johnson & Johnson Slaps a Major Band-Aid on Pandemic

While you were debating blueberry smoothie vs. greasy b/e/c on Saturday, the FDA authorized Johnson & Johnson’s vaccine for emergency use. 

Game = changed. The federal government expects to distribute 100 million doses of the J&J vaccine by the end of June, starting with 4 million this week. On top of the doses provided by Moderna and Pfizer-BioNTech, that means a vaccine will be available to every American adult who wants one by the end of July. 

• J&J’s vaccine is only one dose and can be stored at normal refrigeration temperatures, so it’s ideal for use at drive-thru vaccination sites and with “transient population groups,” such as those on college campuses. 

It’s the Covid era, so you know there’s a “but.” The US is still dealing with new Covid-19 variants, particularly B1351, and the decline in case numbers looks like it’s plateaued. Plus, the J&J vaccine’s effectiveness rate is a bit lower than the other two, so public health authorities are worried about people dismissing it as a second-rate option. 

Bottom line: The vaccine works really well and health leaders encourage everyone who’s eligible to get it. 

WORK

Science Says: Zoom Fatigue Is Real

The constant stream of eyeball-straining, headache-inducing, don’t-get-caught-yawning Zoom calls are having a tangible effect on our brains, according to a new study from Stanford researchers. 

The study, which is the first peer-reviewed article to look at the psychological consequences of spending so much time on video calls, highlights how stressful it is to stare at our co-workers on such a frequent basis. 

• “When someone’s face is that close to ours in real life, our brains interpret it as an intense situation that is either going to lead to mating or to conflict,” according to a news release from Stanford.
• Yes, you read that correctly. 

Zoom out: Investors are maybe feeling some Zoom fatigue, too. Shares of the company are down around 16% in the last 10 days after exploding 443% in 2020. Zoom reports Q4 earnings this week. 

SPONSORED BY GOLDMAN SACHS

The Ultimate Scrollstopper

Goldman Sachs.

Whether we need one or not, we’ve all spent some time scrolling through job postings. Well, readers, the scroll stops here: Goldman Sachs is hiring.

Goldman believes who you are makes you better at what you do, and that’s why they seek out all kinds of people with all kinds of skills, interests, and experiences. Even if you've never imagined a career in finance, there’s a place for you at Goldman.

As a company dedicated to advancing inclusivity and opportunity, Goldman Sachs knows that culture and teamwork are key. And they want you to be part of that team. If you’re a big dreamer and you’re looking for a place to make those dreams a reality, check out the career opportunities at Goldman Sachs here.

GRAB BAG

Key Performance Indicators

Quote: "I don't think we say thank you enough, so I want to say thank you to Tiger."—Following his PGA Tour win yesterday, 24-year-old Collin Morikawa expressed gratitude for Tiger Woods, who was hospitalized following a scary car crash last week. Some golfers wore Tiger's signature Sunday uniform—a red shirt and black plants—to show their appreciation. Tiger later tweeted, "It is hard to explain how touching today was..."

Stat: The average number of writers on a No. 1 hit on the Billboard Hot 100 chart last year was 5.5, up from 2.1 in 1990. The recent buying frenzy for song catalogs raises interesting questions of who should benefit, writes the WSJ.

Read: Sapiens author Yuval Noah Harari on what we’ve learned from a year of Covid. (Financial Times) 

CALENDAR

The Week Ahead: Stimulus, Jobs Report, and an Oil Decision

Stimulus: While you were sleeping early Saturday, the House of Representatives passed President Biden’s $1.9 trillion stimulus package. The bill, which includes $1,400 direct payments and more unemployment relief, will head to the Senate...after which a new version will head back to the House, and ultimately to Biden’s desk for his signature.

Economic data: This Friday is the first Friday of the month, which means it’s jobs report day. Economists are projecting 218,000 jobs were added in February, up from 49,000 in January.  

Earnings: Retail dominates this week’s earnings slate, with Target, Nordstrom, Wendy’s, Kroger, Gap, and Costco all reporting Q4 financials. 

Everything else:

• Jerome Powell speaks: The Fed chair, whose words can move markets, will talk at a WSJ summit Thursday.
• Energy in focus: With oil prices surging, OPEC+ members will meet on Thursday to discuss whether to boost output accordingly.
• Today is World Compliment Day: Hey, is that a new haircut? Looks great.

GIVEAWAY

Elevate Your Hydration Game

Now that you've read a big heaping of business news, it's once again time to remind you about our water bottle giveaway.

What: This week, we're giving away limited-edition Morning Brew water bottles to our readers.

How: All you need is to get five referrals by Sunday to win.

When: By Sunday.

Yep, it's all pretty simple. A few things to note are 1) your current referral count does not matter for this giveaway and 2) it's available to US readers only (sorry).

Bottom line: If you've ever wanted to make your coworkers jealous on a Zoom call...the Brew water bottle is the ultimate show-off tool.

Share the newsletter and claim your water bottle.

WHAT ELSE IS BREWING

• A list of all the Golden Globe winners from last night's mostly remote event.
• Jane Fraser takes over as CEO of Citigroup today, becoming the first woman to run a major US bank. 
• At least 18 people were killed by security forces in demonstrations across Myanmar yesterday, the bloodiest day since the military took power a month ago.
• Walmart poached two senior Goldman Sachs bankers to help lead the retailer’s fintech startup, according to Bloomberg.
• NY Gov. Andrew Cuomo has been accused of sexual harassment by a second former aide. Under pressure from fellow Dems, Cuomo said he’d ask a top judge and NY’s attorney general to lead an investigation.
• Robinhood is planning to confidentially file for an IPO as soon as March, per Bloomberg.

SPONSORED BY GOLDMAN SACHS

It doesn’t matter if you’ve never considered a career in finance; Goldman Sachs is seeking people with all types of backgrounds, interests, skills, and experience. They want curious and collaborative people to dream up big things for their clients and their community. Click here if you’re one of those people.

BREW'S BETS

Emoji backstories: The Emojipedia blog is filled with great content, including posts on a) what every heart emoji really means and b) the history of the syringe emoji.

Dive back into the week:

• Shallow dive: Draw an iceberg and see how it will float 
• Medium dive: Coinbase’s pitch deck from 2012
• Deep dive: Five pandemic mistakes we keep repeating
• Cannonball: Google’s ocean of books

GAMES

Meet the Parents

Name the corporate owner of each of the following brands.

Example: Tide → Procter & Gamble

1. Acura 
2. Banana Republic 
3. Twitch 
4. GEICO 
5. Nickelodeon 
6. Blow Pop 

ANSWER

1. Acura = Honda
2. Banana Republic = Gap Inc.
3. Twitch = Amazon
4. GEICO = Berkshire Hathaway
5. Nickelodeon = ViacomCBS
6. Blow Pop = Tootsie Roll Industries