Berkshire Hathaway Letters to Shareholders: 1965 2014 Warren Buffett, Max Olson Google ספרים

berkshire hathaway letters to shareholders 1965-2018
berkshire hathaway letters to shareholders 1965-2018

He rarely comments on current world events , and is very good at focusing on just writing about the company’s dealings. I learned that they are not stock pickers, they buy businesses and not tickers. The pros and cons of buying a bit of a publicly-traded company vs. owning some in full became clear. I think the smart ones can be influenced by their very prudent business selection process. Warren Buffett’s letters to his shareholders for the past 50 years contain wisdom on business and investing like no other book.

Full text of Warren Buffett’s annual letter to shareholders – Economic Times

Full text of Warren Buffett’s annual letter to shareholders.

Posted: Sun, 23 Feb 2020 08:00:00 GMT [source]

This was one of Berkshire Hathaway’s first major acquisitions in its transition to earning most of its revenue by acquiring other companies. Before this, Berkshire Hathaway had mostly made money from investing in stocks. The company’s operations and underlying value are the only things that matters, to Buffett.

Don’t read those numerous related books, warren and munger’s original writings are the best. Berkshire, these shareholders would sometimes acknowledge, might be far from the best selection they could have made. But they would add that Berkshire would rank high among those with which they would be most comfortable.

At AOL, where shareholders had lost a total of 54.1%, CEO Steve Case came out with compensation totaling $164M. Again and again, at companies like Citigroup, Tyco, CMGI and others, CEOs made hundreds of millions while their shareholders faced heavy losses. H. Brown Shoe Company, at the time the leading manufacturer of work shoes in North America.

Compensation committees have sent CEO pay out of control

I view him as an optimist, an attitude that certainly helps if you plan really long term. Oh, and compound interest unfolds before your eyes, year by year, as we are nearing the 60th letter . It’s hard to sum up what I learned but it was a good journey.

Warren Buffett’s Shareholder Letters – Collection From 1950s To Today – ValueWalk

Warren Buffett’s Shareholder Letters – Collection From 1950s To Today.

Posted: Mon, 21 Aug 2017 12:21:29 GMT [source]

Over 2019, the value of Berkshire Hathaway’s “share” of earnings from those companies — including Apple, Coca-Cola, and American Express — amounted to more than $8.3B. In 1973, Buffett made one of his most successful investments ever in the Washington Post. By piling cash into distressed American companies like General Electric, Goldman Sachs, and Bank of America during the 2008 financial crisis, Buffett reportedly made $10B by 2013. For one, conglomerates tend to buy companies in their entirety. One, great businesses have “no interest in having anyone take them over,” says Buffett.

Each year, Warren Buffett writes an open letter to Berkshire Hathaway shareholders. There is so much to learn from this book which is a collection of shareholders letters written by Warren Buffett for the shareholders of Berkshire Hathaway. It took me a couple of months to finish it but it was really worth every minute I spent reading it. Buffett just doesn’t talks about investing, but also about business, life, ethics, accounting and many practical aspects of life. This is one book that I’ll keep referring back to from time to time. A textbook for finance, entrepreneurs, business management, and so much more.

Textile business which, over the longer term, is unlikely to produce returns on capital comparable to those available in many other businesses. Intense competition in the reinsurance business has produced major losses for practically every company operating in the area. Our underwriting loss was something over 12%—a horrendous figure, but probably little different from the average of the industry.

Underlying the actual industry knowledge share, Buffet takes on something of a mentor role for his shareholders and helps the reader avoid the pitfalls of bad investing, bad reporting and bad business practice. This strategy of train and explain means you will leave this book with a wealth of knowledge you never knew you needed. It’s been claimed by many that you’ll learn more reading these letters than getting an MBA. There are hundreds of books about Buffett’s life, advice, and methods. These are his actual words; a “lesson plan” of his views on business and investing.

Value investing

We enjoy communicating directly with you through this annual letter, and through the annual meeting as well. I often forget about the operational leverage that comes from retained earnings and dividend growth. Obviously, Berkshire does not believe in dividends, and will probably never pay a dividend.

berkshire hathaway letters to shareholders 1965-2018

Because of the extraordinary price rises in raw materials during 1973, which show signs of continuing in 1974, we have elected to adopt the “lifo” method of inventory pricing. This method more nearly matches current costs against current revenues, and minimizes inventory “profits” included in reported earnings. I also find it very reassuring the way that he talks so clearly both about the positive aspects of his company, but also about the negative ones. In a few cases, even in years in which BH achieved very positive results, Buffett still doesn’t shy away from highlighting mistakes that were committed and must be avoided in the future. There’s a sense of humor and self-deprecating nature to many of his remarks that is a far cry from the general tone employed by most other companies.

Because of that, the book is considerably long and if you decide to read it all at once you’ll find some of the year-to-year discussions a little repetitive. This is to be expected, as each letter was originally written to be read with about a year difference, and the overall nature of the business does not usually change that much in this amount of time, but something to be mindful of berkshire hathaway letters to shareholders nonetheless. The sometimes humorous read is full of wisdom, and it’s a giant undertaking to read, for sure. However, it was worth it and by the end I got to develop a reading habit that will help me with the regular and much shorter books in the future. Reading the letters was like reading a comic that comes out in sequels. A good comic leaves you gasping for more after every chapter.


The boat will be introduced on April 29 at our Berkshire Bazaar of Bargains. And, for two days only, shareholders will be able to purchase Jimmy’s masterpiece at a 10% discount. Your bargain-hunting chairman will be buying a boat for his family’s use.

  • From an $8.6 million purchase of National Indemnity in 1967, Berkshire has become the world leader in insurance “float” – money we hold and can invest but that does not belong to us.
  • The price of the company went to virtually zero within just a few years.
  • Knowing the ending didn’t ruin the surprises about which investments panned out and which ones didn’t (some, like Coke, weren’t surprising, but others, like Blue Chip, were more so).
  • It is a matter of what one keeps, not what one makes, as measured during a 12-month period of time, and in one’s lifetime.
  • The justification of this measuring stick switch does not sit well with many analysts, including me.

In 1951, Buffett made the decision to invest more half of his net worth in GEICO. He increased his holdings dramatically during the bear market of the mid-70s when GEICO was struggling. By 1995, he owned half of the company — and later that year, he arranged to buy the rest. Buffett excoriated these leaders in his2001 letter to shareholders.

Correctly picking the winners requires understanding which companies are building a competitive advantage that will be defensible over the very long term. During the dotcom boom, that meant understanding how the infrastructure of the web would change over the next several decades — an impossible task for any observer at the time. He observes that the airplane industry suffered similarly. While the technological innovation was even more impressive than the car, the industry as a whole could be said to have failed most of its investors.

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This book compiles the full, un-edited versions of 50 years of Warren Buffett’s letters to the shareholders of Berkshire Hathaway. In addition to providing an astounding case study on Berkshire’s success, Buffett shows an incredible willingness to share his methods and act as a teacher to his many students. A lot of the annual letter is boilerplate and some years have nothing meaningful, but periodically there is a section that is worth its weight in gold. I do believe someone else pulled out all of those sections and someone not looking to devote a year of reading to this book might consider reading that version. One learns a lot reading these letter, about Berkshire, business, ethics, many different industries, people of mostly high caliber, and how business and financial minutiae do or don’t make sense. The letters start fairly small in size but grow bigger each year, following the increase in size and scope of Berkshire Hathaway itself.

berkshire hathaway letters to shareholders 1965-2018

I know of no reporting mechanism that would come close to describing and measuring the risks in a huge and complex portfolio of derivatives,” he wrote. A railroad like Burlington Northern might buy a futures contract, for example, that entitles them to buy fuel at a certain fixed price at a certain fixed point in the future. If the price of fuel stays the same or decreases, they still have to buy at the elevated price.

Market volatility

His letters to shareholders are unwavering consistent, unfailingly loyal to principles and standards, and kind to all readers and interested persons. Warren Buffett has not just a gift for capital allocation, but down-to-earth demeanor, attractive sense of humor, and uncanny ability to read people. This is an amazing resource and a value beyond calculation. Warren E. Buffett first took control of Berkshire Hathaway Inc., a small textile company, in April of 1965.

“Helped” by accounting and business verbiage, my reading speed was unusually low, in the 8-12 pages/hour range. So expect to spend as much time as watching the entire TV show Friends twice, or a 10 seasons of a full-length 42 minute show without ads, or about a week of your time (in non-stop terms). Sometimes a sentence spans over 6 lines and by the end of it you forget how it started, forcing you to re-read constantly. Especially with today’s short attention spans of people, it’s not easy. But substracting a star because of the difficulty and length would be akin to complaining that a double black diamond is too steep to ski on. But then saying this book is a collection of annual letters written by Warren Buffett is akin to saying “History is about some important dates”.

The breadth of his generosity was extraordinary – geared always to improving the lives of others, particularly those in Fort Worth. Whatever the financial benefits, Paul quickly concluded that selling to a competitor was not for him. He next considered seeking a financial buyer, a species once labeled – aptly so – a leveraged buyout firm.