H. Brown had to “stand in the shoes of owners” and truly weigh whether the cost of a project was worth the potential results. A bit repetitive, as you would expect, but it was interesting to see how the different businesses in the Berkshire portfolio changed over time as economic conditions changed. This set of letters should be part of any serious investor’s collection of books. Reading Buffet’s letters is a good starting point that introduces one to this entire field of shareholders letters , which when thoughtfully written can prove to be a rich source of wisdom for their readers. Buffet has also demystified various concepts like Economic earnings vs accounting earnings, his rationale as to when the decisions like stock repurchases make sense, why BH has never distributed dividends.

You can find most of the letters for free on Berkshire’s website, but this compiles them into a well-designed, easily readable format. Warren is a great guy, the kind that you’d love to have as a grandpa – and not in hopes of inheriting a fortune but as someone to learn valuable lessons from. By way of these letters he could be any long-term investor’s virtual grandpa. I think those that don’t shy away from owning a stock for decades will find the most value in the book, however the day traders and crypto fans will of course see it utterly boring. If the importance of sitting and sleeping comfortably with your investment is of importance you might end up heeding some of his advice or even become a shareholder. Warren Buffett is God at understanding capitalism, and dissecting businesses.

Every year, your company makes substantial federal income tax payments. In 2021, for example, we paid $3.3 billion while the U.S. Treasury reported total corporate income-tax receipts of $402 billion. Additionally, Berkshire pays substantial state and foreign taxes. “I gave at the office” is an unassailable assertion when made by Berkshire shareholders. BHE, however, has been paying no dividends on its common stock for the past 21 years.

At Berkshire Hathaway’s 2004 meeting, he claimed that “when stock can be bought below a business’s value, it is probably the best use of cash” for a company. There are https://forexarena.net/ hundreds of books about Buffett’s life, advice, and methods. These are his actual letters — word for word — a „lesson plan” of his views on business and investing.

S&P Futures

Buffet is one of the rare business leaders who believe in passing on the wisdom that they have acquired over the years to the next generation. Though, the letters are really voluminous but the effort to complete the entire bunch is really worth it. Buffet has shared the thought process that has gone into making various investment decisions and has also tried to educate about the economics of the various industries like Insurance.

He is widely considered the most successful investor of the 20th century. Buffett is the primary shareholder, chairman and CEO of Berkshire Hathaway and consistently ranked among the world’s wealthiest people. He was ranked as the world’s wealthiest person in 2008 and as the third wealthiest person in 2011.

In addition to investments, Berkshire owns dozens of companies outright including BNSF railroad, Geico insurance, several major utilities and an eclectic assortment of other companies such as Dairy Queen, NetJets and Precision Castparts. Berkshire now owns nearly $13 billion worth of Occidental’s common shares outright. It also holds $10 billion worth of preferred Occidental shares that pay an $800 million annual dividend and warrants to buy another 83.9 million shares at $59.62 each. Berkshire picked up those warrants and preferred shares in 2019 for helping finance Occidental’s acquisition of Anadarko.

Book Samples

In his 2019 shareholder letter, Buffett reported that Berkshire Hathaway’s top 10 stock investments had generated almost $3.8B in dividends over the previous year. If you choose to read just one book on investing, this is it. Warren Buffett is the Einstein of investment, a figure so large it towers over any other. These compilation of his letters to shareholders serves as a compendium of his investment principles and how they not only shaped his company but also became sharper through the dull edge of experience.

Book lovers have their own list but this list can never be definitive since there can be no universal consensus on what should go into “the toughest reads out there! Each person’s list, like the idea of utopia or hell, is personal and unique. Buffett is called the „Oracle of Omaha” or the „Sage of Omaha” and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.

In spring 2001, Cisco’s shareholders had lost a total of 28.6% on their investment — yet CEO John Chambers took home $157M, mostly on his stock options (about $330,000 of that total consisted of direct, cash compensation). It’s no wonder Buffett publishes an updated table of Berkshire’s per-share performance alongside the stock index at the beginning of each year’s shareholder letter, which has become an annual event in the world of business and finance. Warren Edward Buffett is an American business magnate, investor, and philanthropist.

From an $8.6 million purchase of National Indemnity in 1967, Berkshire has become the world leader in insurance “float” – money we hold and can invest but that does not belong to us. Including a relatively small sum derived from life insurance, Berkshire’s total float has grown from $19 million when we entered the insurance business to $147 billion. Many people perceive Berkshire as a large and somewhat strange collection of financial assets. In truth, Berkshire owns and operates more U.S.-based “infrastructure” assets – classified on our balance sheet as property, plant and equipment – than are owned and operated by any other American corporation. At yearend, those domestic infrastructure assets were carried on Berkshire’s balance sheet at $158 billion. That number increased last year and will continue to increase.

Buffett’s company owns nearly 24% of Occidental Petroleum

Many investors follow Buffett’s actions because he is regarded as one of the greatest investors ever. OMAHA, Neb. — Billionaire Warren Buffett’s company bought more than $200 million worth of Occidental Petroleum’s shares over the past week, giving it control of 23.6 percent of the oil producer’s stock. “Cousin” Jimmy Buffett has designed a pontoon “party” boat that is now being manufactured by Forest River, a Berkshire subsidiary.

When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact. Thoroughly enjoyed Buffett’s words over the first 47 years of Berkshire after his partnership took over ownership. Look forward to a revised edition with as much Buffett writing as can be organized into it. These books are reputed to be very tough slogs and there is no definitive guarantee you will turn the last page and feel glad you dived in. In fact, chances are most of these books will be flung across the room well before the last chapter. A lot of them are wilting in bookshelves around the world waiting for a day when the owner inevitably bundles it into the charity box for donation.

Never use borrowed money to buy stocks

And this was an advantage that Buffett was beginning to see was inflation-proof. That conviction gives him the ability to buy even bigger portions of the companies in which he invests when the overall market goes into a downturn. With a speculator mentality, Buffett might have offloaded GEICO’s stock in the mid-70s. With a downturn in progress and healthy gains already realized, he would have come out ahead.

Through Berkshire, our shareholders own many dozens of businesses. Some of these, in turn, have a collection of subsidiaries of their own. For example, Marmon has more than 100 individual business operations, ranging from the leasing of railroad cars to the manufacture of medical devices. Berkshire’s owners, it should be noted, were not the only beneficiary of that course correction. Treasury, proceeded to collect many tens of billions of dollars from the company in income tax payments.

• Warren Edward Buffett is an American investor, industrialist and philanthropist.
• Each person’s list, like the idea of utopia or hell, is personal and unique.
• Berkshire effectively owns 100% of this group, whose massive float value we earlier described.
• To my surprise, our float increased $9 billion last year, a buildup of value that is important to Berkshire owners though is not reflected in our GAAP (“generally-accepted accounting principles”) presentation of earnings and net worth.
• Both of us like to sleep soundly, and we want our creditors, insurance claimants and you to do so as well.

While Buffett does disagree with executives who buy back their company’s shares simply because they have the cash to do it or to inflate earnings, he also believes in buying stocks when they’re underpriced. The second problem is that gaining a controlling ownership in a company often requires paying an above-the-market share price, known as a control premium. To solve this problem, conglomerates often manufactured the overvaluation of their stocks. I would recommend this book to anyone that is a business student and interested in the business world. Buffett has put together annual letters to the shareholders of Berkshire Hathaway over the last 50 years.

A wealth of Berkshire facts and figures are set forth in the annual 10-K that the company regularly files with the S.E.C. and that we reproduce on pages K-1 – K-119. Some shareholders will find this detail engrossing; others will simply berkshire hathaway letters to shareholders prefer to learn what Charlie and I believe is new or interesting at Berkshire. Our position carries with it the responsibility to report to you what we would like to know if we were the absentee owner and you were the manager.