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Bailey McCann, Opalesque New York:

The latest round of investor letters from some of the biggest names in investing are out. The most highly anticipated of these letters is Buffet's which had a lot to say about the current market environment and his own performance. Notably, he points to the lag between Berkshire and the S&P500, while the comparison may not truly 1:1, Buffet offers a clear vision for the value of Berkshire even with a lag.

"Charlie Munger, Berkshire’s vice chairman and my partner, and I believe both Berkshire’s book value and intrinsic value will outperform the S&P in years when the market is down or moderately up. We expect to fall short, though, in years when the market is strong – as we did in 2013. We have underperformed in ten of our 49 years, with all but one of our shortfalls occurring when the S&P gain exceeded 15%," the letter says.

Seth Klarman of Baupost Group has also released his letter to investors and there are some parallels to Buffet, in terms of setting expectations for investors. Baupost made news when it returned nearly $4bn to clients at the end of the year, and in the letter he explains that instead of letting the firm grow and sprawl, he wants to be lean and focused. "We know a good thing when we see it," he writes.

The case could be made that both firms, and more broadly, big firms in general are having a tougher time deploying massi......................

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