No. of Recommendations: 3
https://www.berkshirehathaway.com/news/nov1025.pdfThere are of course many interesting other bits, and various interpretations, of his letter but this one sort of stood out:
Stan eventually built our new Sunday product, and for some years our paper – formerly
hemorrhaging cash – earned over 100% annually (pre-tax) on our $33 million investment. This was
important money to Berkshire in the early 1980s. 'for some years' presumably means at least two, and presumably less than five - that's some serious 100% (plus) compounding going on there!
FWIW, ChatGPT says the other Sunday paper folded in the early '80s(if you read the linked letter you'll get more context).
Presumably Berkshire's paper got a lot of new ad revenue and new subscribers leading to this ROI 'for some years'.
I don't know how costs would have scaled to service this, but probably the salaries for more ad and subscriber employees, and costs for paper and ink, etc, grew at a much lower rate than the revenue.
