Berkshire Hathaway letter 2018

(#18414) #1

Berkshire Hathaway released letter to shareholders for 2018 yesterday, Saturday the 23rd.
Have something to read tomorrow morning :scroll:

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(Emma (#20 😎)) #2

It’s 1994 cutting edge web design :laughing:

I’m sure someone on fiver could sort that for him

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(#18414) #3

:rofl:
It might be my memory playing a joke on me, but I think I recall reading in one of the documents he wrote (hard to remember which one right now), and that can be found in the website, that Berkshire’s website design is that way on purpose. The man says something like he has more important (read profitable) things to care about; and that it somehow it shows the company’s culture. Please don’t take my word for granted on this.
Given his track record I think I’m going to let him off. Just this time though :stuck_out_tongue_winking_eye:

PS: if I find that document I’ll share it

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(Alex Sherwood) #4

Here’s a few summaries of the letter but they’re all a bit short really :pensive: hopefully we’ll get something better next week.

Edit - The NY Times piece is an improvement -

Warren Buffett downbeat on deals in annual Berkshire Hathaway letter - FT

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(Alex Sherwood) #5

This is a nice explainer for Buffett’s switch from releasing the book value per share to recommending investors value Berkshire Hathaway based on it’s share price -

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(#18414) #6

I find it very hard to select or highlight just 2 or 3 ideias from his letters. Nevertheless, here goes:

(…) “let me remind you of our prime goal in the deployment of your capital: to buy ably-managed businesses, in whole or part, that possess favorable and durable economic characteristics. We also need to make these purchases at sensible prices.” (…) (page 4)

(…) "Berkshire held $112 billion at yearend in U.S. Treasury bills and other cash equivalents, and another $20 billion in miscellaneous fixed-income instruments. We consider a portion of that stash to be untouchable, having pledged to always hold at least $20 billion in cash equivalents to guard against external calamities. We have also promised to avoid any activities that could threaten our maintaining that buffer.

“Berkshire will forever remain a financial fortress. In managing, I will make expensive mistakes of commission and will also miss many opportunities, some of which should have been obvious to me. At times, our stock will tumble as investors flee from equities. But I will never risk getting caught short of cash.” (…) (page 6)

(…) “We use debt sparingly. Many managers, it should be noted, will disagree with this policy, arguing that significant debt juices the returns for equity owners. And these more venturesome CEOs will be right most of the time.

“At rare and unpredictable intervals, however, credit vanishes and debt becomes financially fatal. A Russian roulette equation – usually win, occasionally die – may make financial sense for someone who gets a piece of a company’s upside but does not share in its downside. But that strategy would be madness for Berkshire. Rational people don’t risk what they have and need for what they don’t have and don’t need.” (…) (page 10)

Now, this is what I call a statement:
Berkshire will forever remain a financial fortress.

I think these quotes pretty much say it all about BH competitive advantage. In stressfull times they can remain cool.

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(HP) #7

The whole idea of Berkshire has been to use Insurance Float to buy companies in periods of market decline and then hold forever reinvesting dividends.

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