Annual Letter to Berkshire Shareholders (2019) [pdf]
berkshirehathaway.com
Annual Letter to Berkshire Shareholders (2019) [pdf]
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Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#2Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#3"In reviewing my uneven record, I've concluded that acquisitions are similar to marriage: They start, of course, with a joyful wedding – but then reality tends to diverge from pre-nuptial expectations. Sometimes, wonderfully, the new union delivers bliss beyond either party's hopes. In other cases, disillusionment is swift. Applying those images to corporate acquisitions, I'd have to say it is usually the buyer who encounters unpleasant surprises. It's easy to get dreamy-eyed during corporate courtships. Pursuing that analogy, I would say that our marital record remains largely acceptable, with all parties happy with the decisions they made long ago.
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#4After having seen so much nonsense accounting in the books of so many startups (especially recently, it feels like a growing trend) it's refreshing to see GAAP. The difference in standards between the startup universe and the 'real world' is actually scary. There have been far too many instances of people getting taken for a ride based on EBITDA when the company's financials were far from healthy.
Am I alone in thinking this?
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#5After having seen so much nonsense accounting in the books of so many startups (especially recently, it feels like a growing trend) it's refreshing to see GAAP. The difference in standards between the startup universe and the 'real world' is actually scary. There have been far too many instances of people getting taken for a ride based on EBITDA when the company's financials were far from healthy. Am I alone in think…
I run a startup and we use GAAP.
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#6I’ve been enjoying this letter when this weird outdated analogy stopped me cold in my tracks:
„In reviewing my uneven record, I’ve concluded that acquisitions are similar to marriage: They start, of course, with a joyful wedding – but then reality tends to diverge from pre-nuptial expectations. Sometimes, wonderfully, the new union delivers bliss beyond either party’s hopes. In other cases, disillusionment is swift.“
What’s bizarrely archaic about this is that if he had simply said „Dating“ or „relationships“ he would have been equally correct, if not more so. And unlike a marriage, he can trade portions of his company holdings back, which in a sense makes it more like dating than a marriage proper.
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#7After having seen so much nonsense accounting in the books of so many startups (especially recently, it feels like a growing trend) it's refreshing to see GAAP. The difference in standards between the startup universe and the 'real world' is actually scary. There have been far too many instances of people getting taken for a ride based on EBITDA when the company's financials were far from healthy. Am I alone in think…
Probably. Berkshire itself doesn't seem to think this; the letter starts off by arguing that GAAP earnings are a misleading metric and encouraging shareholders to ignore them.
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#8After having seen so much nonsense accounting in the books of so many startups (especially recently, it feels like a growing trend) it's refreshing to see GAAP. The difference in standards between the startup universe and the 'real world' is actually scary. There have been far too many instances of people getting taken for a ride based on EBITDA when the company's financials were far from healthy. Am I alone in think…
Buffett thinks GAAP is almost useless now, and doesn't think accountants have a clue. He follows own "owners earnings" model, which is not a standard of any kind.
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#9I’ve been enjoying this letter when this weird outdated analogy stopped me cold in my tracks: „In reviewing my uneven record, I’ve concluded that acquisitions are similar to marriage: They start, of course, with a joyful wedding – but then reality tends to diverge from pre-nuptial expectations. Sometimes, wonderfully, the new union delivers bliss beyond either party’s hopes. In other cases, disillusionment is swift.“…
I'm missing your point here. Do you not like marriage analogies? Or you don't think his analogy and very well known life experience doesn't apply (he has an interesting personal experience with marriage)? Or do you think most of the people who read his letter have no background in marriage?
I find the analogy very appropriate and well stated. Much like a marriage he can't just give back a portion of an entity he's involved in without legal pain and the pain of explaining it to his investors and board members and the company he is having trouble with. I guess that's like dating but to me it's closer to a marriage and divorce.
Re: Annual Letter to Berkshire Shareholders (2019) [pdf]
#10After having seen so much nonsense accounting in the books of so many startups (especially recently, it feels like a growing trend) it's refreshing to see GAAP. The difference in standards between the startup universe and the 'real world' is actually scary. There have been far too many instances of people getting taken for a ride based on EBITDA when the company's financials were far from healthy. Am I alone in think…
Buffett thinks GAAP is almost useless now, and doesn't think accountants have a clue. He follows own "owners earnings" model, which is not a standard of any kind.
GAAP is definitely an imperfect standard, so I don't begrudge them going their own way (and their way seems to be reasonable, from a cursory view). My comment mostly comes from the frankly ludicrous financials that have been making headlines in the last few years.