Please be respectful of others' privacy, and avoid sharing personal information or sensitive content without their permission. If you are unsure if something is appropriate to share, ask for permission (use the 'Privately email' option when replying to their post) or avoid sharing it altogether.
- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 0
from 2013, " Nevertheless, both individuals and institutions will constantly be urged to be active by those who profit
from giving advice or effecting transactions. The resulting frictional costs can be huge and, for investors in
aggregate, devoid of benefit. So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a
farm.
My money, I should add, is where my mouth is: What I advise here is essentially identical to certain
instructions I've laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife's
benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to
certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee
could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P
500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to
those attained by most investors ' whether pension funds, institutions or individuals ' who employ high-fee
managers."
No. of Recommendations: 2
from the 2014 annual, " I would be remiss if I didn't salute another key constituency that makes Berkshire special: our shareholders.
Berkshire truly has an owner base unlike that of any other giant corporation. That fact was demonstrated in
spades at last year's annual meeting, where the shareholders were offered a proxy resolution:
RESOLVED: Whereas the corporation has more money than it needs and since the owners unlike
Warren are not multi billionaires, the board shall consider paying a meaningful annual dividend on
the shares.
The sponsoring shareholder of that resolution never showed up at the meeting, so his motion was not
officially proposed. Nevertheless, the proxy votes had been tallied, and they were enlightening.
Not surprisingly, the A shares ' owned by relatively few shareholders, each with a large economic interest
' voted 'no' on the dividend question by a margin of 89 to 1.
The remarkable vote was that of our B shareholders. They number in the hundreds of thousands ' perhaps
even totaling one million ' and they voted 660,759,855 'no' and 13,927,026 'yes,' a ratio of about 47 to 1.
Our directors recommended a 'no' vote but the company did not otherwise attempt to influence
shareholders. Nevertheless, 98% of the shares voting said, in effect, 'Don't send us a dividend but instead
reinvest all of the earnings.' To have our fellow owners ' large and small ' be so in sync with our
managerial philosophy is both remarkable and rewarding.
I am a lucky fellow to have you as partners.
Warren E. Buffet"
No. of Recommendations: 0
2016" To recap Berkshire's own repurchase policy: I am authorized to buy large amounts of Berkshire shares at
120% or less of book value because our Board has concluded that purchases at that level clearly bring an instant and
material benefit to continuing shareholders. By our estimate, a 120%-of-book price is a significant discount to
Berkshire's intrinsic value, a spread that is appropriate because calculations of intrinsic value can't be precise.
The authorization given me does not mean that we will 'prop' our stock's price at the 120% ratio. If
that level is reached, we will instead attempt to blend a desire to make meaningful purchases at a value-creating
price with a related goal of not over-influencing the market.
To date, repurchasing our shares has proved hard to do. That may well be because we have been clear in
describing our repurchase policy and thereby have signaled our view that Berkshire's intrinsic value is
significantly higher than 120% of book value. If so, that's fine. Charlie and I prefer to see Berkshire shares sell in
a fairly narrow range around intrinsic value, neither wishing them to sell at an unwarranted high price ' it's no
fun having owners who are disappointed with their purchases ' nor one too low. Furthermore, our buying out
'partners' at a discount is not a particularly gratifying way of making money. Still, market circumstances could
create a situation in which repurchases would benefit both continuing and exiting shareholders. If so, we will be
ready to act."
No. of Recommendations: 2
2018 annual letter, " Long-time readers of our annual reports will have spotted the different way in which I opened this letter. For
nearly three decades, the initial paragraph featured the percentage change in Berkshire's per-share book value. It's
now time to abandon that practice.
The fact is that the annual change in Berkshire's book value ' which makes its farewell appearance on page
2 ' is a metric that has lost the relevance it once had. Three circumstances have made that so. First, Berkshire has
gradually morphed from a company whose assets are concentrated in marketable stocks into one whose major value
resides in operating businesses. Charlie and I expect that reshaping to continue in an irregular manner. Second, while
our equity holdings are valued at market prices, accounting rules require our collection of operating companies to be
included in book value at an amount far below their current value, a mismark that has grown in recent years. Third, it
is likely that ' over time ' Berkshire will be a significant repurchaser of its shares, transactions that will take place at
prices above book value but below our estimate of intrinsic value. The math of such purchases is simple: Each
transaction makes per-share intrinsic value go up, while per-share book value goes down. That combination causes
the book-value scorecard to become increasingly out of touch with economic reality.""
