Buffett’s Annual Words of Weight
Warren Buffett’s seventy-billion-dollar investing career comes with a running commentary. Annual shareholder letters from Berkshire Hathaway and his earlier partnership stretch back almost seventy years, and they’re brain food!
He advocates stocks as ownership shares of real businesses rather than just blips on a Bloomberg screen. He recommends asset-light, understandable companies with long runways of undervalued reinvestment opportunities. He’s unyieldingly long-term, hell-bent on working only with trustworthy managers, and when he speaks, markets move.
The legendary investor is 90 years old, and his business partner Charlie Munger, 96. Hopefully, that means Buffett still has six good years left in him, but shares in Berkshire are starting to move on succession plans. A new duo in Ajit Jain and Greg Abel have big boots to fill, but also a big cash pile to play with…
The best investor out there hasn’t been putting money to work for his backers, quoting “sky-high” bull market prices. He’s left Abel and Jain with billions of dollars to look for that touted “elephant” investment that will move the needle for Berkshire, and he believes it’s there. “Your company is 100% prepared for our departure.”
On the coronavirus, he admitted the economy had come down, but only “down from a very good level.” On the Presidential Race, he implied only that we should “wait and see.” In keeping with his principles, Warren usually bats away current issues and politics in his letters. He ignores invitations to time tops and bottoms and talks business.
“The Oracle of Omaha” also weighed in on monetary policy, but only to press that “it’s not our game to predict interest rates. Pundits who opine themselves on these subjects reveal more about themselves than they reveal about the future.” That’s a typical Buffett burn!
A bearish contingent argues that “value is dead,” Buffett underperforming “growth stocks” in the market with a portfolio stuck in the past. It’s true, Buffett has underperformed. Who knows what gains he’s missing by sitting out of “The Great Bull Run?”
However, lessons in his letters have stayed relevant for more than half a century. Long-term, his simple advice works, and it’s what keeps Berkshire Hathaway shares buoyant.