As I read through the Annual Shareholder Letters of Berkshire Hathaway, I’ll share them on this blog with my highlights and notes.
The 1977 one is very interesting as it shows Berkshire Hathaway at a much earlier stage and a small fraction of the value they currently enjoy yet already exhibiting the thoughtfulness, pragmatism, and humility that has allowed them to refine their very disciplined approach.
You’ll see my highlights, underlines, and notes on the PDF below. Key takeaways for me, who is looking for simpler and more sustainable value creation opportunities that can compound over time, are:
- Look at Return on Equity Capital (and compare with other opportunities).
- Be very honest with yourself – both good and bad – do the necessary analysis and take the necessary next steps.
- Respect outside forces, the headwinds and tailwinds that affect investments.
- High integrity, competent, diligent management is the ultimate differentiator.
- Avoid being impressed by short-term and near-term performance.
- Be very clear about your definition of an outstanding business or investment.
- Control should be with the most capable of delivering value.