Broker Check

Fifty Years of Warren Buffet: And Still Going Strong!

| April 10, 2015
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I know I am not alone in my anticipation of reading his annual letter to shareholders. However, I do believe I may foster an abnormally high level of enthusiasm and excitement over the annual event.  I not only look forward to reading his words of wisdom, but I set a special alarm for the Saturday morning they are released to the public! The highlight this year is that both Warren Buffett and his business partner Charlie Munger each wrote a letter to shareholders to reflect on fifty years of working and building Berkshire Hathaway together. What a treat for an investment nerd like me!

The letters were filled with fantastic advice and stories of success. I also appreciated hearing about mistakes made and lessons learned from many failures along the way.  Perhaps that is one of the reasons I like reading these letters; as successful as they have been as investors, no one is able to take the journey of wealth creation without a few bumps in the road. 

The Wall Street Journal even joined in the half-century celebration. They complied some excellent highlights from the past fifty years to share with readers. I simply cannot help myself- I feel I need to share some of my favorites!1

From the 1991 letter:

“Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.” 

From the 2004 letter:

“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.” 

From the 2013 letter:

“Charlie and I always considered a ‘bet’ on ever-rising U.S. prosperity to be very close to a sure thing…Indeed, who has ever benefited during the past 237 years by betting against America?  If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder.  And the dynamism embedded in our market economy will continue to work its magic.  America’s best days lie ahead.” 

I wish I could share more excerpts-- there are so many wonderful ideas and comments to share!It isn’t always easy to follow sage advice of long-term strategies when we are bombarded with quick-fix, emotionally-charged market commentary.  The world becomes a small place when we are connected 24 hours a day.  The financial headlines change like Iowa weather.  This spring is no exception. During a recent three week period, we experienced new record lows of -10 degrees or colder (that’s without factoring in the wind-chill) all the way to a new record high of over 80 degrees!  Volatility in the stock markets, interest rates, commodities and the value of the U.S. dollar are about as crazy as this weather, and will mostly likely continue into the future.  No one knows what the short-term markets will do. Not Warren. Not Charlie. And certainly not me! I do know that winters are cold in Iowa and summers are hot.  Not exactly headline news.  

Who would tune into a TV channel that only gave boring climate news day after day? We already know what to expect with climate: cold in Siberia, warm in Costa Rica. The same might be true regarding good long-term investment advice.  It may not be exciting, but it may certainly be worth taking some time to tune in when we are looking for ways to navigate the ever-changing complex world of investing. 

In closing, I share with you one final quote from Mr. Buffet’s latest letter: “I am a lucky fellow to have you as partners.”2 Knowledge, wisdom, and experience are all nice to have. But the most rewarding part of this endeavor is the relationship we've built together.  I appreciate the trust you place with us to help you achieve that which is important to you.

References:
[1] “50 Years of Berkshire Annual Letters: Here are Some Highlights”. The Wall Street Journal. 2015. Grocer, Stephen.
[2] “Berkshire Hathaway Inc. Letter to Shareholders”. 2015. Buffett, Warren & Munger, Charles T.    

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