Buffett’s company, Berkshire Hathaway Inc., recorded a net income increase of 61 percent because the value of investments and derivatives rose rapidly in 2009. Residential construction business in helping the performance of Berkshire’s performance exceeded the S & P 500 for the first time since 2004.

Buffett to write this letter to many repeat business base that has made the company a giant. However, the letter does not convey how companies should conduct risk management.

Buffett said, CEOs and boards that have hired him to pay a high price if the company they are stuck in trouble because of risky investments. Buffett complained about, not the CEO or director who suffer most because of the failure of the company during the economic crisis, but the shareholders.

“In my view, the board of directors from financial institutions failed in his duty if the CEO can not urge her to bear the full burden of risk controls,” wrote Buffett. “If he was not able to do that, he must find a new job,” said Buffett.

Buffett told shareholders, he was responsible for the risk taken by Berkshire. He also has 98 percent of his net worth is associated with Berkshire shares that he would personally shocked if the company hit problems.

Lucky

Derivative contracts Berkshire help unrealized profit of 787 million U.S. dollars of investment after the 2008 recorded a loss of 7.5 billion U.S. dollars.

Most of Berkshire’s derivatives operation is similar to an insurance policy. Some are protected if certain stock indices will be weakened at 15 or 20 years. Another contract protects credit losses of about 100 companies and several other contracts to protect the credit risk of private companies.

Such investments helped Berkshire booked net income of 8055 billion U.S. dollars or 5193 U.S. dollars (USD 48 million) per share class A in 2009. Net income rose 61 percent compared with last year’s earnings of $ 4994 billion U.S. dollars or 3224 U.S. dollars (USD 30 million) per share Class A. Performance is also above analysts estimates.

Still, Buffett admitted, there was a mistake last year, which is letting debt and losses on NetJet too long. Also let your credit card through GEICO insurance unit turned into a failure that must be sold for U.S. $ 50 million pretax loss.

Buffett gives a lot of enlightenment and education for the new shareholders in his letter. Berkshire shareholders increased 65,000 in February as part of the acquisition of rail operator Burlington Northern Santa Fe Corp.. The new investors might not be familiar with Buffett’s approach to writing that handles around 80 subsidiaries.

Berkshire businesses including corporate clothing, furniture, and jewelry. However, insurance and utility businesses occupy more than half the company’s earnings. Berkshire also has major investments in companies, like Coca-Cola Co. and Wells Fargo & Co..

Analyst Justin Fuller said, more than two years of Buffett uses his annual letter to Berkshire’s talking about.