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December 14, 2018

Warren Buffett’s thoughts

Fear is the foe of the faddist, but the friend of the fundamentalist

A Bloomberg report (Buffett Broadens Portfolio by Spending $23.9 Billion in Quarter) dated Nov 7, 2011, said that Warren Buffett’s Berkshire Hathaway Inc invested US$23.9 billion in the third-quarter, the most in at least 15 years, as he accelerated stock purchases and broadened the portfolio beyond consumer and financial-company holdings. “Buffett, 81, drew down Berkshire’s

How Warren Buffett handles management succession

Warren Buffett is a great believer in succession planning. In his chairman’s letter (28 February 2006) to Berkshire Hathaway shareholders for Year 2005, he said: “As owners, you are naturally concerned about whether I will insist on continuing as CEO after I begin to fade and, if so, how the board will handle that problem.

Warren Buffett on retained earnings and repurchase program

Berkshire Hathaway’s belief in retaining earnings as a way to strengthen its business can be seen in this excerpt from Warren Buffett’s letter to shareholders (February 26, 2011) for Year 2010: “Furthermore, not a dime of cash has left Berkshire for dividends or share repurchases during the past 40 years. Instead, we have retained all

When financial institutions swim naked

“You only learn who has been swimming naked when the tide goes out…” This quote comes from Warren Buffett in his letter (February 2008) to Berkshire Hathaway shareholders for Year 2007. Mr Buffet was commenting on the woes facing financial institutions. Here is an excerpt: “Some major financial institutions have, however, experienced staggering problems because

Warren Buffett’s thoughts on record earnings

In his letter to Berkshire Hathaway’s stockholders as far back as March 14, 1978 for FY2007, Warren Buffett has this to say about record earnings: “Most companies define “record” earnings as a new high in earnings per share. Since businesses customarily add from year to year to their equity base, we find nothing particularly noteworthy in a management performance

Berkshire Hathaway principles on manager-owner relationship

Among Warren Buffett’s letters to Berkshire Hathaway stakeholders, one that gave shareholders a good summary of Berkshire Hathaway’s major business principles pertaining to the manager-owner relationship is that of March 14, 1984 for Year 1983. Here is a gist of the summary: * Although Berkshire Hathaway’s form is corporate, its attitude is partnership, treating shareholders as

ABWA – acquisitions by walking around

In his letter to Berkshire Hathaway shareholders (March 1, 1996) for Year 1995, Warren Buffett said: “A few years back, management consultants popularized a technique called “management by walking around” (MBWA). At Berkshire, we’ve instituted ABWA (acquisitions by walking around).” What is this ABWA that Mr Buffett was talking about? “In May 1994, a week

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