Berkshire Hathaway Inc. 2022 Shareholder Letter
Most of you here would've heard about Berkshire Hathaway, the legendary company by the legendary Warren Buffet, Charlie Munger, and in some smaller sense, Ajit Jain.
Their yearly shareholder letter is a big draw and followed by millions of investors across the world. The salient aspects of their latest 2022 shareholder letter, released on 25th Feb 2023, are condensed in the following 13 points which I found very relevant. Go through them and try to incorporate them in your investing habits.
Pay special attention to Point numbers 1, 5, 8, 9 and 13.
Charlie and I think pretty much alike. But what it takes me a page to explain, he sums up in a sentence. His version, moreover, is always more clearly reasoned and also more artfully – some might add bluntly – stated.
Here are a few of his thoughts, many lifted from a very recent podcast:
1. The world is full of foolish gamblers, and they will not do as well as the patient investor.
2. If you don't see the world the way it is, it's like judging something through a distorted lens.
3. If you don't care whether you are rational or not, you won't work on it. Then you will stay irrational and get lousy results.
4. Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.
5. Don't bail away in a sinking boat if you can swim to one that is seaworthy.
6. A great company keeps working after you are not; a mediocre company won't do that.
7. Warren and I don't focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.
8. Ben Graham said, "Day to day, the stock market is a voting machine; in the long term it's a weighing machine." If you keep making something more valuable, then some wise person is going to notice it and start buying.
9. There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don't count on getting rich twice.
10. You don't, however, need to own a lot of things in order to get rich.
11. You have to keep learning if you want to become a great investor. When the world changes, you must change.
Warren and I hated railroad stocks for decades, but the world changed and finally the country had four huge railroads of vital importance to the American economy. We were slow to recognize the change, but better late than never.
12. Finally, I will add two short sentences by Charlie that have been his decision-clinchers for decades: "Warren, think more about it. You're smart and I'm right."
13. I will add to Charlie's list a rule of my own: Find a very smart high-grade partner – preferably slightly older than you – and then listen very carefully to what he says.
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