There's going to be a day where there won't be any more annual letters from him.
Is there anyone as good as him? He has become a household name, but maybe there are other Buffets out there that we don't talk about?
Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
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Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#52Here's an annotated version of the letter by Bloomberg https://www.bloomberg.com/news/features/2017-02-25/lessons-f...
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#53There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
America is worth way more than $90 trillion. He's valuing it like a buyer :) As a quick back-of-envelope check: American GDP in 2016 was $18.86 tn. The son of a bitch wants it at a 4.7 trailing multiple, after a relatively slow-growth year. All that praise - and then a 4.8x multiple. Now I know how he butters up his acquisition targets :) EDIT: I am getting downvoted, but I am keeping this. You guys don't realize tha…
You are probably getting downvoted because it seems unlikely that a multiple of GDP had to anything to do with Mr. Buffets analysis of American Wealth.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#54There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
they all represent a net gain for Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion. This was a gain that was achieved not by starting from scratch but by stealing lands from indigenous people and forcing Africans to work that land. I'm not sure if you can describe the kidnapping, murder, rape and ultimately genocid…
While I think it's important to remember these atrocities, I think that for economic understanding it's important to note that these were not the major drivers of growth.
Remember that atrocities like that happened in many places that did not grow into giant economies. Stealing land and enslaving people may have given a head start, but clearly something else delivered the big gains.
If you look at the history and the economic charts, the big boost was started by the industrial revolution.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#55Has anyone ever attended a shareholder meeting? Sounds kind of fun.
Yeah, I made the "capitalist hajj" to Omaha in 2005. It was fun, though I didn't really learn anything I didn't already know by reading his stuff. Like he says, buy Vanguard mutual funds.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#56There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
hyper-nationalistic, filled with bravado, lauding yet reserved, sense of authenticity, extremely humble, it's austere, category of conversation in many other contexts, optimism from a source that does not appear to use it as an instrument of control Sorry English is not my first language and it is not easy for me to understand such advanced writing. Is it that you like the sort of pride that quantifies the material w…
I'm not the author, but I think they were alluding to the type of pride that results in negative forms of nationalism, especially when it's tied into ideas about ethnic states. Various nationalist parties (e.g. the British National Party in my country) are actually thinly veiled parties for racial supremacy, and the Nazi regime was born out of a myth of German natural supremacy. Not to say that all nationalism is like this, but there is a certain strain of national identity that cares much more about race or religion than culture or values.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#57Earlier quoted context omitted.
Yes. But why do you want that? Why the need to state this at the moment?
Life expectancy of 86 year old male is 5.4 years.
Of the average 86 year old male, you mean. I think he wouldn't bat an eye on getting the best personal health care on the face of the planet (it's also an important long-term goal for him.) He wouldn't overpay for it, either.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#58There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
America is worth way more than $90 trillion. He's valuing it like a buyer :) As a quick back-of-envelope check: American GDP in 2016 was $18.86 tn. The son of a bitch wants it at a 4.7 trailing multiple, after a relatively slow-growth year. All that praise - and then a 4.8x multiple. Now I know how he butters up his acquisition targets :) EDIT: I am getting downvoted, but I am keeping this. You guys don't realize tha…
I upvoted you, I guess most people downvoted you for the use of "son of a bitch", since most people like Warren Buffet.
Regarding the 90 trillion, I disagree with him. I see a country as a pearl: there's a tiny nugget, a bit of dust or some other small thing that starts the process of creating the pearl inside the shell of they oyster. Then over time more and more mother of pearl is deposited until the pearl is created.
The US mainland hasn't seen a war since 1865. Even the Civil War never touched many parts of the mainland, such as New York or Chicago.
And you've been depositing "nacre" for over 2 centuries at a rate that in the past decade has been around 10 trillion per year. I know that a lot of that wealth doesn't actually come back to the US, a lot of it is immaterial, that there's also a lot of destruction and regeneration even without war, but there's no way I'd evaluate the current wealth of the US at only 90 trillion.
It's got to be at least 10x the current GDP, if not more, in my opinion.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#59Earlier quoted context omitted.
Suppose you're a business with a lot of positive cash flow, but you also have a lot of exposure to the USD-MXN exchange rate. Maybe you have factories in Mexico but sell to the US, it doesn't matter. In that case you can pay a hedge fund to hedge your money so that if the exchange rate collapses you make enough money on the stock market to compensate, so your business will survive until the exchange rate climbs back.…
Most hedge funds have very little to do with the kind of hedging you describe. If you had that kind of exposure to currency risks, you wouldn't go to a hedge fund. You can easily hedge that risk yourself with futures or options. If you wanted to pay somebody for it, you would go to your banker and he would do it for you for a fraction of the 2/20 fees charged by hedge funds.
The average banker has no idea how to hedge any serious amount of money, nor does the average banker understand what kind of hedging strategy is appropriate for a business. Nothing about hedging with futures or options is easy. Also, hedge funds don't charge 2/20 anymore like in the good old days.
Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]
#60There's one particular passage I'd like to point out, on page 5: Our efforts to materially increase the normalized earnings of Berkshire will be aided – as they have been throughout our managerial tenure – by America’s economic dynamism. One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenu…
America is worth way more than $90 trillion. He's valuing it like a buyer :) As a quick back-of-envelope check: American GDP in 2016 was $18.86 tn. The son of a bitch wants it at a 4.7 trailing multiple, after a relatively slow-growth year. All that praise - and then a 4.8x multiple. Now I know how he butters up his acquisition targets :) EDIT: I am getting downvoted, but I am keeping this. You guys don't realize tha…
An interesting thought, is GDP really the correct figure to be looking at though? Really what we would want is the 'national earnings' in a net sense.