Tag Archive

In his 2014 Berkshire Hathaway Annual Letter, Warren Buffett discusses the LTV corporation and its CEO, Jimmy Ling, as a cautionary tale about the dangers of financial hype and unrealistic expectations in the market. Key takeaways include: Financial markets can get irrational and follow charismatic figures like Jimmy Ling Don’t … Read More

In his 1983 Berkshire Hathaway Annual Letter, Warren Buffett explained why a profitable business might not be a wise acquisition. While good businesses are good places to seek acquisitions, focusing purely on operating performance without considering true acquisition cost can lead to misjudgments. Here’s an excerpt from the letter: We … Read More

In his 2013 Berkshire Hathaway Annual Letter, Warren Buffett outlined an investing strategy that could be used by non-professional investors to achieve success in the stock market. His key points for non-professional investors were: You don’t need special skills to invest. American businesses generally do well over time Aim to … Read More

In his 2008 Berkshire Hathaway Annual Letter, Warren Buffett emphasizes that seeking approval should not be the aim of investing. This mentality can be detrimental for several reasons: It clouds judgment: When seeking validation, investors might become less attuned to new information or critical analysis, potentially missing valuable opportunities or perpetuating flawed … Read More

In his 2007 Berkshire Hathaway Annual Letter, Warren Buffett discussed the ‘gruesome’ businesses that investors should avoid at all cost. Here’s an excerpt from the letter: Now let’s move to the gruesome. The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and … Read More

In his 1997 Berkshire Hathaway Annual Letter, Warren Buffett discusses his strong preference for using cash over issuing Berkshire stock in acquisitions, citing a historical pattern of stock-only mergers resulting in shareholders being worse off. The difficulty arises from the ownership of a remarkable collection of businesses, making it challenging … Read More

In his 2011 Berkshire Hathaway Annual Letter, Warren Buffett explained why he invests in productive assets (businesses, farms, real estate) over cash/currency or sterile assets (gold) during times of economic uncertainty. His reasons for preferring productive assets: Resilience against inflation: They can maintain their purchasing power by continuously producing goods and … Read More

In his 1998 Berkshire Hathaway Annual Letter, Warren Buffett explained how businesses can inflate their performance by hiding bad results and only presenting good ones. Using a golf analogy he provided two scenarios: Front-loading bad scores: A golfer purposefully scores terribly in the first round, creating a “reserve” of bad shots. … Read More

In his 1991 Berkshire Hathaway Annual Letter, Warren Buffett discusses the two critical mistakes he made when Berkshire Hathaway had the chance to acquire a significant stake in Fannie Mae in 1988. Stopping buying after an initial price increase: This prevented him from fully seizing the potential growth. Selling their … Read More

During the 1998 Berkshire Hathaway Annual Meeting, Warren Buffett discussed Ben Graham’s ‘frozen corporations’ and why they should be avoided. Here’s an excerpt from the meeting: WARREN BUFFETT: Well, we discount at the long rate just to have a standard of measurement across all businesses. But we would take the … Read More

In his 1996 Berkshire Hathaway Annual Letter, Warren Buffett says to be successful at investing, you don’t need to understand complex concepts like beta, efficient markets, modern portfolio theory, option pricing, or emerging markets. Instead, you should focus on two key principles: how to value a business and how to … Read More

In his 1993 Berkshire Hathaway Annual Letter, Warren Buffett explained why an investor’s primary concern should be whether their investment will provide enough purchasing power over time to compensate for the initial investment plus a reasonable return. While this risk cannot be precisely calculated, it can be assessed with a … Read More

During the 2000 Berkshire Hathaway Annual Meeting, Warren Buffett says that he has seen everything in the markets, including companies selling for tens of billions of dollars that are worthless, and companies selling for 20% of their worth. He believes that in markets wild things create their own truth for … Read More

During the 1996 Berkshire Hathaway Annual Meeting, Warren Buffett discourages the strategy of waiting for market panics to buy great companies, comparing it to a mortician waiting for a flu epidemic, suggesting it may not be a reliable investment approach. Here’s an excerpt from the meeting: Buffett: Well I won’t … Read More

During the 1998 Berkshire Hathaway Annual Meeting, Warren Buffett explained why he gave up his “cigar butt” approach to investing. Arguing that businesses with low returns on equity are not good investments, even if they are purchased cheaply, because time is the enemy of the poor business and the friend … Read More

In his 1991 Berkshire Hathaway Annual Letter, Warren Buffett uses the quote, “If at first you do succeed, quit trying.” It’s a tongue-in-cheek way of saying that once you find a great investment, you should hold on to it. This is because great businesses are rare and difficult to find. … Read More

In his 2000 Berkshire Hathaway Annual Letter, Warren Buffett explained why he makes no attempt to pick winners that will emerge from an ocean of unproven enterprises. Here’s an excerpt from the letter: At Berkshire, we make no attempt to pick the few winners that will emerge from an ocean of unproven … Read More