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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]

#211

Post by throwaway5752 »

dsacco wrote: post #17

There'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…

Look, it's great and all but 1) it was not a standing start (NY and VA have colonial histories starting over 400 years ago) 2) even at a low rate of return of 4% wealth should have compounded over 12,200% over 240 years (or: assuming a 4% IRR and current $90T valuation, ignoring inflation were the colonies worth $750M?) 3) this spanned the industrial and computer revolutions and all nations benefited.

If you don't read this much, then go back and read prior ones, WEB writes this way all the time. I like the guy a lot, but he does.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#212

Post by gizmo »

tptacek wrote: post #197
gizmo wrote: post #185

Earlier quoted context omitted.

I said 2/20 fees aren't the norm anymore. You quoted from the letter. I provided a source that shows hedge fund fees are going down and remarked that the Buffett bet started before the 2008 crash when fees were higher then they are now. Because it was a boom period and because index funds that push down management fees have only recently become popular.

It seems to be that either Buffett must be mistaken or you are, right? His claim is that the funds involved in the bet are 2/20 funds, and while the bet started in 2008, it is still running today.

Technically, he claims they pay less than 2/20 but no details are provided. Nowadays 2/20 fees are considered high, not the norm. Fees are trending down. This is something you can easily verify. Buffett did say 2/20 is the "prevailing hedge-fund standard" but he's mistaken.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#213

Post by austenallred »

throwaway2048 wrote: post #202
austenallred wrote: post #189

Earlier quoted context omitted.

While I think it's important to not neglect the horrors of slavery and the theft of lands from indigenous peoples, it's disingenuous to imply that the sole (or a major) cause of America's current and continuous booming economy was either of these. The easiest way to dispel this notion is to show that the vast, vast majority of American wealth (>99%) came about long after slavery had ended. Indeed, if we could return…

Microsoft might have billions of lines of code today, but they would be precisely nowhere without the few K-lines of code that composed microsoft basic for the altair. Its misleading to say that 99%+ of american wealth occured long after slavery etc ended, because it still started there.

True, but I don't know if it's accurate that the United States wouldn't exist without slavery. I wish we could accurately run simulations; a lot of variables.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#214

Post by argigg »

p4db wrote: post #95
differentView wrote: post #42

Earlier quoted context omitted.

What's the worst he's done?

I do not know what the worst is that he has done. For sure he and his business partners tried to strongarm the german city / community of Egelsbach to sell it's airport (Germany's largest small airplane airport, near Frankfurt/Main) to him. The aim was to expand the airport, at the expense of the inhabitants. The upside would have been 1-10 jobs, the downside a lot of noise and reduced price of property and life qual…

Surely the main upside of expanding an airport wouldn't be "1-10 jobs", it would be increased transportation and commerce?

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#216

Post by jrochkind1 »

thedevil wrote: post #54
jdavis703 wrote: post #29

Earlier quoted context omitted.

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…

> 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.

To be fair, there are few if any countries with the scale of stolen/free land and enslaved labor as in US history.

You'd have to look at the European 'colonies' for both. The US of course was the first colony to become independent -- meaning an end to it's profits being extracted for the home country, and instead re-invested locally.

So I'd say there are basically no other countries with close to the scale of profits built from stolen land and enslaved labor, and then not extracted for a colonial home country overseas.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#217

Post by mattmanser »

austenallred wrote: post #213
throwaway2048 wrote: post #202

Earlier quoted context omitted.

Microsoft might have billions of lines of code today, but they would be precisely nowhere without the few K-lines of code that composed microsoft basic for the altair. Its misleading to say that 99%+ of american wealth occured long after slavery etc ended, because it still started there.

True, but I don't know if it's accurate that the United States wouldn't exist without slavery. I wish we could accurately run simulations; a lot of variables.

Try running it without the centuries of british and european progress and see what you end up with.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#218

Post by baursak »

friedman23 wrote: post #203
jdavis703 wrote: post #29

Earlier quoted context omitted.

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…

> This was a gain that was achieved not by starting from scratch but by stealing lands from indigenous people Seeing as how you are saying that the growth of America was dependent on 'stealing' land you must be implying that the success is dependent on the stealing of resources. Which is trivially proven false by simply looking at South America. > forcing Africans to work that land Forcing Africans to work the land s…

Industrialization of the North started with textiles. Which were due to cotton. Which was due to slave labor.

http://www.pbs.org/wnet/african-americans-many-rivers-to-cro...

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#219

Post by argigg »

yorwba wrote: post #127
skolsuper wrote: post #39

Earlier quoted context omitted.

What is it for 86 year old male multi-billionaires?

tl;dr: ~5.3 years. I collected all Wikipedia articles on American billionaires who died in 2008 - 2017: http://tools.wmflabs.org/dschwenbot/intersection/index.php?l... That got me 74 results. I wgot the articles and manually removed the women based on related Wikipedia categories (turns out https://en.wikipedia.org/wiki/Aubrey_McClendon was a man, I would have removed him just based on the name). Then I grepped the f…

This is going to give you biased results. Consider what would happen if you used the same method to determine the life expectancy of computer programmers.

Re: Warren Buffett's Annual Letter to Berkshire Hathaway Shareholders [pdf]

#220

Post by tehlike »

ambicapter wrote: post #124

> We may in time experience a decline in float. If so, the decline will be very gradual – at the outside no more than 3% in any year. The nature of our insurance contracts is such that we can never be subject to immediate or near-term demands for sums that are of significance to our cash resources. This structure is by design and is a key component in the unequaled financial strength of our insurance companies. It wi…

Blackswan events are probably contained through diversification.

His thinking on the surface is very solid: insurance business is a cash cow in some regard, and if the market is down, it is actually an opportunity to move that money into equities.

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