About Wat They do at Berkshire
~Charlie & I allocate your savings at Berkshire between two related forms of ownership.
First, we invest in businesses that we control, by buying 100% of each. Berkshire directs
capital allocation at these subsidiaries & selects the CEOs.
(1/n)
~Charlie & I allocate your savings at Berkshire between two related forms of ownership.
First, we invest in businesses that we control, by buying 100% of each. Berkshire directs
capital allocation at these subsidiaries & selects the CEOs.
(1/n)
~In our second category of ownership, we buy publicly-traded stocks through which we
passively own pieces of businesses. Holding these investments, we have no say in management.
"Charlie and I are not stock-pickers; we are business-pickers".
(2/n)
passively own pieces of businesses. Holding these investments, we have no say in management.
"Charlie and I are not stock-pickers; we are business-pickers".
(2/n)
About His Mistakes in picking businesses
~Capitalism has two sides: The system creates an ever-growing pile of losers while concurrently
delivering a gusher of improved goods and services. Schumpeter called this phenomenon “creative
destruction.”
(3/n)
~Capitalism has two sides: The system creates an ever-growing pile of losers while concurrently
delivering a gusher of improved goods and services. Schumpeter called this phenomenon “creative
destruction.”
(3/n)
About Coke Investment
~In Aug 1994,Berkshire completed its 7 yr purchase of the 400 million shares of Coca-Cola. The total cost was $1.3 billion
The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend
had increased to $704 million
(4/n)
~In Aug 1994,Berkshire completed its 7 yr purchase of the 400 million shares of Coca-Cola. The total cost was $1.3 billion
The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend
had increased to $704 million
(4/n)
About Amex Investment
~Berkshire’s purchases of Amex were essentially
completed in 1995 &, also cost $1.3 billion. Annual dividends received from this investment have grown from $41 million to $302 million. Those checks, too, seem highly likely to increase.
(5/n)
~Berkshire’s purchases of Amex were essentially
completed in 1995 &, also cost $1.3 billion. Annual dividends received from this investment have grown from $41 million to $302 million. Those checks, too, seem highly likely to increase.
(5/n)
At yearend, our Coke investment was valued at $25 billion while Amex was recorded at $22 billion.
Accounting for roughly 5% of Berkshire’s net worth.
~I had made a similarly-sized investment mistake in the 1990s,
(6/n)
Accounting for roughly 5% of Berkshire’s net worth.
~I had made a similarly-sized investment mistake in the 1990s,
(6/n)
one that flat lined & simply retained its $1.3B value in 2022. (eg. high-grade 30yr bond)
Lession for Investors : The weeds wither away in significance as the flowers bloom.
(7/n)
Lession for Investors : The weeds wither away in significance as the flowers bloom.
(7/n)
Over time, it takes just a few winners to work wonders. &, yes, it helps to start early & live
into your 90s as well.
(8/n)
into your 90s as well.
(8/n)
About Acquiring "Alleghany Corporation"
~Alleghany delivers special value to us because Berkshire’s unmatched financial strength allows its insurance subsidiaries to follow valuable & enduring investment strategies unavailable to virtually all competitors.
(9/n)
~Alleghany delivers special value to us because Berkshire’s unmatched financial strength allows its insurance subsidiaries to follow valuable & enduring investment strategies unavailable to virtually all competitors.
(9/n)
Aided by Alleghany, our insurance float increased during 2022 from $147 billion to $164
billion. With disciplined underwriting, these funds have a decent chance of being "cost-free over
time".
(10/n)
billion. With disciplined underwriting, these funds have a decent chance of being "cost-free over
time".
(10/n)
About Stock Buybacks
~A minor gain in per share intrinsic value took place in 2022 thru Berkshire share repurchases as well as similar moves at Apple & Amex
The math isn’t complicated: When the share count goes down, your interest in our many
businesses goes up.
(11/n)
~A minor gain in per share intrinsic value took place in 2022 thru Berkshire share repurchases as well as similar moves at Apple & Amex
The math isn’t complicated: When the share count goes down, your interest in our many
businesses goes up.
(11/n)
Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose.
At such times, gains flow only to the selling shareholders
(12/n)
At such times, gains flow only to the selling shareholders
(12/n)
& to the friendly, but expensive, investment banker who recommended the foolish purchases.
(13/n)
(13/n)
About Manipulating Operarating Earnings by Managers
~Tat activity is disgusting. It requires no talent 2 manipulate no's: Only a deep desire to deceive is required. “Bold imaginative accounting,” as a CEO once described to me, has become one of the shames of capitalism.
(14/n)
~Tat activity is disgusting. It requires no talent 2 manipulate no's: Only a deep desire to deceive is required. “Bold imaginative accounting,” as a CEO once described to me, has become one of the shames of capitalism.
(14/n)
About Earnings by S&P 500 Companies
~the 500 earned $1.8 trillion in 2021. I don’t yet have the final results for 2022. Using, therefore, the 2021 figures, only 128 of the 500 (including Berkshire itself) earned $3 billion or more. Indeed, 23 lost money.
(15/n)
~the 500 earned $1.8 trillion in 2021. I don’t yet have the final results for 2022. Using, therefore, the 2021 figures, only 128 of the 500 (including Berkshire itself) earned $3 billion or more. Indeed, 23 lost money.
(15/n)
About "Future of Berkshire"
~Berkshire will always hold a boatload of cash & U.S. Treasury bills along with a wide array of businesses. We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including...
(16/n)
~Berkshire will always hold a boatload of cash & U.S. Treasury bills along with a wide array of businesses. We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including...
(16/n)
financial panics & unprecedented insurance losses.
Our CEO will always be the Chief Risk Officer – a task it is irresponsible to delegate. Additionally, our future CEOs will have a significant part of their net worth in Berkshire shares, bought with their own money.
(17/n)
Our CEO will always be the Chief Risk Officer – a task it is irresponsible to delegate. Additionally, our future CEOs will have a significant part of their net worth in Berkshire shares, bought with their own money.
(17/n)
& yes, our shareholders will continue to save & prosper by retaining earnings.
"At Berkshire, there will be no finish line."
(18/n)
"At Berkshire, there will be no finish line."
(18/n)
"Nothing Beats Having a Great Partner"
Here are few of Charlie's Thoughts
~The world is full of foolish gamblers, and they will not do as well as the patient investor.
~ If you don’t see the world the way it is, it’s like judging something through a distorted lens.
(19/n)
Here are few of Charlie's Thoughts
~The world is full of foolish gamblers, and they will not do as well as the patient investor.
~ If you don’t see the world the way it is, it’s like judging something through a distorted lens.
(19/n)
~ All I want to know is where I’m going to die, so I’ll not go there. & a related thought:
Early on, write ur desired obituary – & then behave accordingly.
~ If you don’t care whether ur rational or not, u won’t work on it. Then u will stay irrational & get lousy results
(20/n)
Early on, write ur desired obituary – & then behave accordingly.
~ If you don’t care whether ur rational or not, u won’t work on it. Then u will stay irrational & get lousy results
(20/n)
Some more thoughts of Charlie Munger..
(21/n)
(21/n)
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