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Saturday, June 17, 2017

1978 Berkshire Hathaway Letter to Shareholders

Link:

Key Points:


  • Accounting issues of consolidating results between wholly owned and partially owned companies
  • Optimism about long term equity holdings 
  • Inability to predict short term equity prices
  • Discussion concerning textile business being a commodity business with no differentiation between competitors
  • Expresses Sentimental attachment to textile business, management,and workers
  • Insurance business produces excellent results
  • Difficult to "buy good insurance businesses"
  • Stock selection criteria; businesses we can understand, with favorable long term prospects, operated by honest and competent people, priced attractively
  • Buys stocks at perceived low valuations in large concentrations
  • Prepared to wait for market to re-value share holdings higher
  • Discussion of disposition retained earnings of companies in portfolio

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