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Annual Letter to Berkshire Shareholders (2019) [pdf]

berkshirehathaway.com

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Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#11

Post by saagarjha »

bravura wrote: post #6

I’ve been enjoying this letter when this weird outdated analogy stopped me cold in my tracks: „In reviewing my uneven record, I’ve concluded that acquisitions are similar to marriage: They start, of course, with a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.“…

> 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.

Err…divorces are a thing? I can’t make sense of this complaint unless you’re somehow claiming that the concept of marriage itself is anachronistic…

Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#12

Post by bravura »

trcollinson wrote: post #9
bravura wrote: post #6

I’ve been enjoying this letter when this weird outdated analogy stopped me cold in my tracks: „In reviewing my uneven record, I’ve concluded that acquisitions are similar to marriage: They start, of course, with a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 in…

I guess what’s strange to me is not the idea that, as you become more committed to a person you discover their flaws and the relationship gets worse. That seems self evident to me and seems to be a common theme both in theory and in practice.

But how many marriages resolve with discovering the person is way better than you imagined? I’m not familiar with this, either through the idealism of poetry or romantic movies, nor through practical experience provided by observing marriages around me. I thought most people assume that you have a honeymoon phase and hopefully that never ends.

Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#13

Post by sethev »

Proziam wrote: post #4

After 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…

The thing that stands out in Buffett's letters (including this one), is his commitment to clearly communicating the true health of the company in the most accurate way possible. That's missing in a lot of corporate communication, which try to spin results or invent creative metrics that make the company look better.

He always shares GAAP as well but will usually point out where he thinks it not useful.

Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#14

Post by benjohnson »

bravura wrote: post #12
trcollinson wrote: post #9

Earlier quoted context omitted.

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 in…

I guess what’s strange to me is not the idea that, as you become more committed to a person you discover their flaws and the relationship gets worse. That seems self evident to me and seems to be a common theme both in theory and in practice. But how many marriages resolve with discovering the person is way better than you imagined? I’m not familiar with this, either through the idealism of poetry or romantic movies,…

In my opinion a marriage is a safe place to raise children - the transformation from 'self' to 'family' can be an extraordinarily joyful and fulfilling experience.

Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#17

Post by halayli »

bravura wrote: post #6

I’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.“…

There is a legal binding contract in marriage. You can walk out of a relationship without having to settle/split assets etc. You cannot in marriage.

Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#19

Post by pmohun »

yuy910616 wrote: post #15

Any book recommendations for someone who would like to learn more about GAAP, accounting, operational earnings, and/or how to evaluate stocks?

Read the last twenty years of Buffet's letters.

No snark intended. His letters intended for investors are the best use of your time rather than a book someone wrote for vanity.

Re: Annual Letter to Berkshire Shareholders (2019) [pdf]

#20

Post by ms512 »

pmohun wrote: post #19
yuy910616 wrote: post #15

Any book recommendations for someone who would like to learn more about GAAP, accounting, operational earnings, and/or how to evaluate stocks?

Read the last twenty years of Buffet's letters. No snark intended. His letters intended for investors are the best use of your time rather than a book someone wrote for vanity.

The Intelligent Investor by Benjamin Graham is a classic.

Graham's approach shaped Buffett's. Personally, I found The Intelligent Investor to be more clearly written than Buffett's letters. It more clearly left me with a framework for how to approach value investing.

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