This is a collection of excerpts that I found useful and wanted to keep. I added most of the sub-headings to quickly find places in the text I found interesting and/or funny.
Initially, I used Microsoft Word, switched to Sphinx when the document grew to over 300 pages, then to Joplin, then to git-versioned Markdown with MkDocs. After switching to WordPress for this site and not finding an easy way to reliably import the existing material (in March/April 2023) I decided to re-read the excerpts and to manually add them to this site.
I do not claim copyright of the excerpts. Complete versions of the shareholder letters (and Berkshire’s annual reports in which they were originally published) are available at: http://www.berkshirehathaway.com/
Note: Page numbers mentioned within the letters refer to pages in Berkshire’s annual reports.
1985:
1986:
1987:
- Excellent businesses can be mundane
- Flexible operating budgets
- Mr. Market vs. efficient markets
- Control purchases vs. stock purchases
- Black Monday
- Debt policy
- Opportunities for acquisitions appear when money is tight
1988:
- What needs to be reported
- CEOs
- Arbitrage
- The takeover field in the 1980s
- Efficient-market theory
- Berkshire’s NYSE listing
- David L. Dodd
1989:
- Taxes and Berkshire’s investment policy
- Ike Friedman who ran Borsheim’s, a jewelry store acquired by Berkshire in 1987
- Junk bonds and LBOs
- Confessions regarding mistakes from 1964-1989
- Selling the old corporate jet and buying a new one
1990:
- The tendency of executives to mindlessly imitate the behavior of their peers
- Buying 10% of Wells Fargo at “panic prices”
- Optimism is the enemy of the rational buyer
- Capital structures that guarantee failure
1991: “If at first you do succeed, quit trying.”
1992:
- When management is “hell-bent on expansion”
- Misconceptions about “value investing”
- Two ways to avoid costly mistakes when investing in equities
- Primary market vs. secondary market
1993:
- Advantages of buy-and-hold investing for tax-paying investors
- You can’t go broke taking a profit?
- Beta vs. investment risk and the case for concentrated investing
- Corporate boards and corporate governance
1994:
- Waiting for opportunities
- Book value vs. intrinsic value
- The acquisition problem: “Aw, fellas, all the other kids have one.”
- Executive compensation for managers of Berkshire’s subsidiaries
- Misaligned interests in executive compensation: stock option arrangements
- Look-through earnings
- Investors should try to price, rather than time, purchases
- Mistake Du Jour
- How Buffett and Munger grow Berkshire’s portfolio of companies
- Most acquisitions harm the owners of the buyer
- “Retailing is a tough business.”
- GEICO corporation
- Berkshire’s Class B Common Stock
1996:
- Executive compensation at GEICO
- “Inactivity strikes us as intelligent behavior.”
- Investing in Inevitables
- Intelligent Investing: Simplicity, Selectivity, and Long-Term Focus
- Unconventional Commitments
- How We Think About Market Fluctuations
- Berkshire always tries to pay cash for acquisitions
- How Berkshire’s managers run their businesses
- The Economics of Property-Casualty Insurance
- Accounting distortions: Restructuring charge
- Tax Advantages of Buying Whole Businesses
- Valuing Stocks and Businesses
- Investment and Speculation
- Full and Fair Reporting
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