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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]

#91

Post by anonu »

tyingq wrote: post #5

The transparency and humble tone is pretty unique. "Unfortunately, I followed the GEICO purchase by foolishly using Berkshire stock" " It was, nevertheless, a terrible mistake on my part" "Despite that cautious approach, I made one particularly egregious error" I bet you don't find that sort of thing in many other annual shareholder letters.

It's easy to be self-effacing when everyone views you as the investing messiah! I do agree with you - it is refreshing to read those quotes from the CEO. But he's "earned" it so-to-speak. Less successful people would probably not make such quotes because they have more to lose.

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

#92

Post by kakarot »

purple-again wrote: post #41
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…

You just described the history of China, South and Central America, the Middle East, Eastern and Western Europe, Australia, our friendly Nordic pillagers. Am I missing any? Oh that's right all those empires that crumbled to dust to form our current nations, them too. You just described the history of Humanity.

Yeah, it isn't that America doesn't deserve its riches, it's that just about every current national government doesn't deserve its riches. The working class is as globally exploited as its ever been.

edit: Yo guys I'm not saying we need to give it all back. History is stained in blood.

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

#93

Post by tim333 »

mrfusion wrote: post #15

Has anyone ever attended a shareholder meeting? Sounds kind of fun.

Been a couple of times a while ago. It was fun especially the first time. If you're read the stories it's fun to see some of the stuff in reality - Omaha, Buffett's house, the furniture mart, Borsheims, the steak house he goes to and so on. I also met Mrs B, now departed and had a book signed by Warren. Some of the fellow visiting shareholders can be interesting too. The actual talk you can see on Yahoo.

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

#94

Post by hueving »

nickbauman wrote: post #40
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…

Slavery was less efficient than a market economy and a free labor pool. Consider the Irish who built the Erie Canal. They were paid mostly in rum and they died off so quickly the bosses didn't care because a fresh crop of Irish workers walked off the boat the following week. Slaves had to be fed and housed and nominally cared for. After all, they cost money and you didn't want to throw away your investment. The slave…

>let's face it: those who like to hide behind "states rights", it all comes back to "states rights to buy and have slaves"

This is an idiotic strawman. That's the equivalent of saying that people who think countries in the European Union should be mostly free to implement their own laws are pro slavery.

Smaller localized government control vs one rule for everyone has little to do with slavery. There is no reason that slavery couldn't exist in a strong central federal government system either.

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

#95

Post by p4db »

differentView wrote: post #42
gizmo wrote: post #18

Earlier quoted context omitted.

Warren Buffett is an expert salesperson, and this tone is the exquisitely crafted product of 70 years of salesmanship. Buffett has worked tirelessly to build his public image, and his "aw-shucks" act is a critical part of that. His image of a down-to-earth person with unquestionable integrity* has enabled him to lock down investment deals under the most favorable possible terms. *) read one of his biographies to see…

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 quality.

A lot of intransparent things were going on, fortunately it seems that things came to a halt.

It's business. I would not believe the image of a business man of his class.

[Disclaimer: I live in Egelsbach, Germany, and I have followed the case with great concern.]

Additional source (in German): https://de.wikipedia.org/wiki/Flugplatz_Frankfurt-Egelsbach

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

#96

Post by tptacek »

gizmo wrote: post #59
pg314 wrote: post #43

Earlier quoted context omitted.

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.

According to the Shareholder's Letter, the 5 funds of funds in the bet portfolio were comprised of funds that largely did charge 2/20, with the fund-of-fund charging an addition 1% plus performance on top of that.

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

#97

Post by hueving »

jdavis703 wrote: post #29
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…

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…

>I'm not sure if you can describe the kidnapping, murder, rape and ultimately genocide of multiple people groups as miraculous

Right, which is also the same thing many native americans tried to do to the immigrant settlers in the West as well.

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

#98

Post by tejohnso »

dankohn1 wrote: post #55
mrfusion wrote: post #15

Has 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.

What about BRK.A?

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

#99

Post by valuearb »

gizmo wrote: post #10
otalp wrote: post #4

"In Berkshire’s 2005 annual report, I argued that active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat still. I explained that the massive fees levied by a variety of “helpers” would leave their clients – again in aggregate – worse off than if the amateurs simply invested in an unmanaged low-cost index fund. ” He…

Hedge funds make perfect sense for people who want to hedge their capital in specific ways. A hedge fund doesn't need to outperform the market to deliver tremendous value to their customers. Secondly, every trade has a counterparty. So somebody necessarily has to be at the loser's end of every trade. For every investment fund that makes oversize profits another fund loses money. It all evens out. That doesn't mean it…

The vast majority of Hedge funds don't hedge and their investors expect the one thing they can't deliver, outperformance.

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

#100

Post by davidivadavid »

logicallee wrote: post #31
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…

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're talking income statement. He's talking balance sheet. Apples and oranges.
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