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Warren Buffett, 93-year-old billionaire and chairman and CEO of investment company Berkshire Hathaway, said: latest annual letter to shareholders on Saturday.
In his letter, Buffett discussed his investment strategy, success stories and lessons learned at Berkshire Hathaway over the past year. Record market capitalization of $930 billion on monday. He also praised Charlie Munger, who designed and helped run Berkshire and died in November at age 99.
Here are some key takeaways from Buffett’s letter. in his own words.
Related: Inside the 60-year friendship between Warren Buffett and Charlie Munger, who started working at the same grocery store
What Berkshire is doing
“Our goal at Berkshire is simple: We want to own all or part of companies that enjoy fundamental and enduringly good economic conditions. Some businesses prosper for a very long time, while others prove to be sinkholes. It’s harder than you think to predict who will be the winners and who will be the losers. People who say they know are usually either self-delusional or snake-oil salesmen.”
Our investment rules
“One of Berkshire’s investing rules has always been and always will be: never risk losing your capital forever. American tailwinds and the power of compound interest help us operate. The stage has been, and always will be, beneficial if you can benefit from it, allowing you to make some good decisions and avoid some serious mistakes in your lifetime.
I believe Berkshire can handle a financial disaster on a scale unlike anything we’ve seen before. This ability is something we cannot give up. When economic turmoil occurs, as it will in fact, Berkshire’s goal is to serve as a national asset, as it was very minor in 2008-09, one of the many financial crises. It would be to help put out the financial fires, not to join them. Companies that, inadvertently or not, caused the conflagration. ”
Warren Buffett, Berkshire Hathaway Chairman and CEO, Daniel Acker/Bloomberg via Getty Images
Two long-term assets: Coca-Cola and American Express
“During 2023, we did not buy or sell any stock in either Amex or Coke, extending Rip Van Winkle’s dormancy period of more than 20 years. , we have once again paid for our inaction last year.” , our share of Amex income By 2023, it has significantly exceeded $1.3 billion Fee What we bought a long time ago.
Lesson from Coca-Cola and Amex? When you find a really great business, stick with it. patience You get paid, and one great business can make up for a lot of mediocre decisions that are inevitable. ”
railway investment
“BNSF is the largest of the six major railroad systems that cover North America.…BNSF’s profits were lower than I expected last year because of lower revenue.Fuel costs were also lower; The wage increases promulgated in Washington far exceeded the country’s inflation target.” This discrepancy could reoccur in future negotiations. ”
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Buffett says Berkshire’s insurance business has been ‘very strong’
“Enough about the issues. Our insurance business did very well last year, setting records for sales, free float, and underwriting profits. Property and Casualty (“P/C”) It plays a central role in growth. We have been in business for 57 years, 5,000 times Increase in trading volume – from $17 million to $83 a billion – We have a lot of room to grow. ”
Success Story (About Buffett’s sister, Bertie)
“In the final chapter of the Omaha Effect,” Bertie, er, Bertie, spent his childhood in a middle-class neighborhood in Omaha and, decades later, emerged as one of the country’s great investors. It appeared.
You might think she invested all her money in Berkshire and just sat there. But that’s not the case. After starting her family in 1956, Bertie was active in her finances for 20 years, holding her bonds, putting her one-third of her money in publicly traded mutual funds, and investing her money in public investment trusts. I traded stocks with some frequency. Her potential remained unnoticed.
Then, in 1980, at the age of 46, Bertie decided to move, despite his brother’s urging. She only held mutual funds and Berkshire, and for the next 43 years she made no new trades. During this period, she became extremely wealthy, even after doing a large amount of philanthropy (think nine figures).
Millions of American investors could have followed her reasoning, which contained only the common sense she somehow absorbed as a child in Omaha. And Bertie seizes the opportunity, returning to Omaha every May to revive her spirits. ”