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Buffett's 2018 annual letter to Berkshire shareholders is out.
berkshirehathaway.com/letters/2018lt…
My takeaways:
berkshirehathaway.com/letters/2018lt…
My takeaways:
WEB has always been precise when comparing book & intrinsic values, BUT for decades he's opened by reporting the % change in per share BV, calling it a flawed but useful proxy for IV.
Thats over.
WEB no longer thinks BV has enough relevance for the top spot, even w/ caveating
Thats over.
WEB no longer thinks BV has enough relevance for the top spot, even w/ caveating
The BV / IV distrinction is not new (he's been talking about it for at least 50 years), & Buffett already made it clear he had rerated the usefulness of BV as a proxy for IV when he scrapped the buyback peg, but I think the stylistic deviation after so many letters is surprising
I think the dog that didn't bark is Buffett on buybacks.
He's the best communicator of business wisdom in history & there is significant confusion about what buybacks actually do in society.
I thought Buffett might enter the fray w/ a killer metaphor or fable.
I wish he had.
He's the best communicator of business wisdom in history & there is significant confusion about what buybacks actually do in society.
I thought Buffett might enter the fray w/ a killer metaphor or fable.
I wish he had.
I thought this was his best turn of phrase:
"We use debt sparingly. Many managers, it should be noted, will disagree with this policy, arguing that significant debt juices the returns for equity owners.
And these more venturesome CEOs will be right most of the time."
"We use debt sparingly. Many managers, it should be noted, will disagree with this policy, arguing that significant debt juices the returns for equity owners.
And these more venturesome CEOs will be right most of the time."
"At rare and unpredictable intervals, however, credit vanishes and debt becomes financially fatal.
A Russian roulette equation – usually win, occasionally die – may make financial sense for someone who gets a piece of a company’s upside but does not share in its downside."
A Russian roulette equation – usually win, occasionally die – may make financial sense for someone who gets a piece of a company’s upside but does not share in its downside."
"But that strategy would be madness for Berkshire.
Rational people don’t risk what they have and need for what they don’t have and don’t need."
Warren Buffett, 2018 annual letter to shareholders
Rational people don’t risk what they have and need for what they don’t have and don’t need."
Warren Buffett, 2018 annual letter to shareholders
The section titled "The American Tailwind" is standard, heartfelt American Buffett-as-American-permabull.
And even though thats true, I think it's statesmanlike and wise in a way few other people talk about history, or America, in politics or in business.
I unabashedly like it
And even though thats true, I think it's statesmanlike and wise in a way few other people talk about history, or America, in politics or in business.
I unabashedly like it
I'll say more on Kraft-Heinz later - food is the only area of Buffett's portfolio that's within my circle of competence and I need more time to think about it.
