Billionaire Warren Buffett is known as one of the world's best investors, and the 93-year-old has a huge following of people who admire his track record and appreciate his sage advice on life and investing. I have supporters.
Buffett's latest annual letter to Berkshire Hathaway shareholders, released Saturday morning, included both.
About stock investment:
“Since March 11, 1942 (the day I first bought stocks), I can't remember a time when I didn't have a large portion of my net worth invested in U.S. stocks. And so far, so good. I pulled the trigger.'' On that fateful day in 1942, the Dow Jones Industrial Average fell below $100. By the end of school, I was down about $5. Things quickly improved and his index is currently hovering around 38,000. America is a great country for investors. All they had to do was sit quietly and not listen to anyone. ”
___
In choosing the winner:
“Our goal at Berkshire is simple: We want to own all or part of companies that enjoy fundamental and enduring good economics. Some businesses will prosper for a very long time, while others will fall into a sinkhole. Predicting who will be the winners and who will be the losers is harder than you might think. And if you know the answer, People who say that are usually either self-delusional or snake oil salesmen.”
___
Market panic:
“Markets can and will stagnate or disappear unexpectedly, as they did for four months in 1914 or for a few days in 2001. If you think things are more stable now than they used to be, remember September 2008, when the speed of communication and the wonders of technology instantly made the world susceptible to paralysis, and we have come a long way since traffic lights. There you have it! These momentary panics don't happen often, but they do happen.
“Berkshire's ability to quickly respond to market grabs with both large amounts of capital and certainty of performance may provide us with large-scale opportunities from time to time. It has expanded significantly, but today's active participants are not mentally stable.”
___
Shareholders like his sister Bertie say this about Berkshire's future.
“Berkshire should do a little better than the average American company, and more importantly, it should run its business with significantly reduced risk of permanent loss of capital.” The above is wishful thinking. This modest aspiration wasn't the case when Bertie invested fully in Berkshire, but it is now. ”
___
About his favorite oil investment:
“At year-end, Berkshire owned 27.8% of Occidental Petroleum's common stock and also held warrants that gave us options to significantly increase our ownership at a fixed price over five years. Berkshire has no interest in acquiring or managing Occidental. The economic viability of the technology has not yet been proven, but Berkshire has no interest in acquiring or managing Occidental. I particularly like the company's ownership and leadership in carbon capture initiatives, both of which greatly benefit our nation.”
___
On Charlie Munger's contribution to Berkshire's success in transitioning from a textile mill to today's conglomerate:
“He told me—that’s right!” – that I made the foolish decision to buy Berkshire stock. But he assured me that since I had already taken action, he would show me how to correct my mistakes. The next thing I tell him is that Charlie and his family never invested a dime in the small investment partnership I was running at the time, and that I used that money to buy Berkshire. Please keep it.
“Furthermore, neither of us anticipated that Charlie would ever own Berkshire stock. Nevertheless, Charlie immediately advised me in 1965, 'Warren, Berkshire. Forget about buying another company like “But now you control Berkshire, so on top of that,'' I had quite a setback, but then I followed his lead. ”
___
For more AP coverage of Warren Buffett, visit: https://apnews.com/hub/warren-buffett or visit Berkshire Hathaway News here: https://apnews.com/hub /berkshire-hathaway-inc
