Author Topic: Berkshire Hathaway 2016 Report just released  (Read 3411 times)

plantingourpennies

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Berkshire Hathaway 2016 Report just released
« on: February 25, 2017, 06:28:14 AM »

aspiringnomad

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Re: Berkshire Hathaway 2016 Report just released
« Reply #1 on: February 25, 2017, 11:00:39 AM »
Thanks! Discussion of The Bet starts on page 21 and it's great. Nothing truly new, but beautifully sums up the passive beats active investing argument as only Buffet can.

RichMoose

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Re: Berkshire Hathaway 2016 Report just released
« Reply #2 on: February 25, 2017, 11:41:48 AM »
A great read as always. I love how the Chairman of one of the largest companies in the world can write to his shareholders like they are friends separated only by distance. It's an art and it's genuine.

Some of the highlights in my view are the Long Bets section, his discussion about willingness to sell large holding stocks if needed, his criticism of accounting standards in the corporate world, and the section on the annual meeting (just because it puts a smile on my face).

Great read and thank for sharing PoP!

bassguitar115

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Re: Berkshire Hathaway 2016 Report just released
« Reply #3 on: February 25, 2017, 02:42:04 PM »
Loved reading the letter as usual. It really makes me want to buy some BRK-B, but I'm going to stick with VTSAX.

Lots of great sections in the letter, but you have to appreciate what a businessman he is. This part made me smile.

Quote
Auto insurance is a major expenditure for most families. Savings matter to them – and only a low-cost operation can deliver those. In fact, at least 40% of the people reading this letter can save money by insuring with GEICO. So stop reading – right now! – and go to geico.com or call 800-847-7536.

Then again at the end of the GEICO section. . .

Quote
Have you called yet? (800-847-7536 or go to geico.com)

SwordGuy

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Re: Berkshire Hathaway 2016 Report just released
« Reply #4 on: February 25, 2017, 03:01:07 PM »
I always find it interesting how he manages to subtly slip in some social commentary that's relevant to the current political or social climate.

marty998

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Re: Berkshire Hathaway 2016 Report just released
« Reply #5 on: February 25, 2017, 04:07:32 PM »
Outstanding read. Thank you for posting.

aspiringnomad

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Re: Berkshire Hathaway 2016 Report just released
« Reply #6 on: February 25, 2017, 04:11:22 PM »
A great read as always. I love how the Chairman of one of the largest companies in the world can write to his shareholders like they are friends separated only by distance. It's an art and it's genuine.

And he's been doing it forever. Loved this except from a letter from 51 years ago:

In January 1966, when I was managing $44 million, I wrote my limited partners: “I feel substantially greater size is more likely to harm future results than to help them. This might not be true for my own personal results, but it is likely to be true for your results. Therefore, . . . I intend to admit no additional partners to BPL. I have notified Susie that if we have any more children, it is up to her to find some other partnership for them.”

yachi

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Re: Berkshire Hathaway 2016 Report just released
« Reply #7 on: February 25, 2017, 05:37:33 PM »
I was a little disappointed with this year's letter.  I expected to see a discussion on airline companies, and didn't, I expected to see a larger discussion on Ted and Todd but didn't.  It is interesting that Ted and Tod have such independence that Buffett usually learns about their decisions from monthly trade sheets.  It sounds like he believes the stock is trading at intrinsic value:

Over time, stock prices gravitate toward intrinsic value.  That's what has happened at Berkshire...

I've been trading in Berkshire as if the repurchase price is a hard floor based on previous comments that Berkshire would "aggressively invest" at 120% of book value.  This year's report states they will not "prop" the stock at this level.  Not wanting to over-influence the market.  I still think it's safe to sell puts at 120% of book value as long as they are backed up by cash or margin room.
Although Buffett clarified they would be willing to sell stock positions if necessary, the oldest stock positions have such high gains that they would be impractical to sell.  Look at Amex and Coca-Cola where market value is 10x what they paid.

Love this quote:
"Every decade or so, dark clouds fill the economic skies, and they briefly rain gold."

tj

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Re: Berkshire Hathaway 2016 Report just released
« Reply #8 on: February 25, 2017, 08:59:15 PM »
Thanks for posting the link. A great read.

HAPPYINAZ

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Re: Berkshire Hathaway 2016 Report just released
« Reply #9 on: February 26, 2017, 09:08:37 AM »
Thank you for posting.  Always enjoyable and informative letter.

COEE

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Re: Berkshire Hathaway 2016 Report just released
« Reply #10 on: February 26, 2017, 11:40:46 AM »
Fascinating!  I've never read one of the reports before.  I really enjoyed "The Bet" as well.  It's interesting that only one of the five funds even performed closely to the S&P.  The other four were outright poor when compared to the S&P.  Ted Seides must be highly embarrassed.

My favorite quote: "Of course, 1,000 monkeys would be just as likely to produce a seemingly all-wise prophet.
But there would remain a difference: The lucky monkey would not find people standing in line to invest with
him."

The last few months I've been watching videos of Mr. Buffett while I enjoy my morning coffee on one or two lazy mornings each the month.  I've started affectionately calling it "Breakfast with Buffett".  My wife giggles when I say that - which makes me happy.

Has anyone been the the BH week in Omaha?  Might be a good roadtrip for me - and a good excuse to see my grandparents nearby.

Livewell

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Re: Berkshire Hathaway 2016 Report just released
« Reply #11 on: February 26, 2017, 01:20:30 PM »
My favorite, in regards to "the bet":

I’m certain that in almost all cases the managers at both levels were honest and intelligent people. But the results for their investors were dismal – really dismal. And, alas, the huge fixed fees charged by all of the funds and funds-of-funds involved – fees that were totally unwarranted by performance – were such that their managers were showered with compensation over the nine years that have passed. As Gordon Gekko might have put it: “Fees never sleep.”


Roots&Wings

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Re: Berkshire Hathaway 2016 Report just released
« Reply #12 on: February 27, 2017, 05:49:24 AM »
Love this quote:
"Every decade or so, dark clouds fill the economic skies, and they briefly rain gold."

Same! Also really liked this part:

"Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks. No one can tell you when these traumas will occur – not me, not Charlie, not economists, not the media...

During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well."

Ocinfo

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Re: Berkshire Hathaway 2016 Report just released
« Reply #13 on: February 27, 2017, 06:01:41 AM »

Has anyone been the the BH week in Omaha?  Might be a good roadtrip for me - and a good excuse to see my grandparents nearby.

Never been but used to work for a Berkshire company that would show our product (metal tubes with wings) and it was always a big deal. Also, company hosted a Berkshire quarterly meeting where I met "Uncle Warren" and Bill Gates at the same time...


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AdrianC

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Re: Berkshire Hathaway 2016 Report just released
« Reply #14 on: February 28, 2017, 06:54:37 AM »
Has anyone been the the BH week in Omaha?  Might be a good roadtrip for me - and a good excuse to see my grandparents nearby.
I went in 2009. I was in South Dakota on a job and finagled the weekend off to drive down to Omaha. I had a good time. I'd go again if I was in the area. I might be in Kansas City during that timeframe, so I'm getting my credential just in case.

Here's a transcript of Buffett's interview on CNBC yesterday:

http://www.cnbc.com/2017/02/27/billionaire-investor-warren-buffett-speaks-with-cnbcs-becky-quick-on-squawk-box.html

MishMash

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Re: Berkshire Hathaway 2016 Report just released
« Reply #15 on: February 28, 2017, 07:17:23 AM »
Fascinating!  I've never read one of the reports before.  I really enjoyed "The Bet" as well.  It's interesting that only one of the five funds even performed closely to the S&P.  The other four were outright poor when compared to the S&P.  Ted Seides must be highly embarrassed.

My favorite quote: "Of course, 1,000 monkeys would be just as likely to produce a seemingly all-wise prophet.
But there would remain a difference: The lucky monkey would not find people standing in line to invest with
him."

The last few months I've been watching videos of Mr. Buffett while I enjoy my morning coffee on one or two lazy mornings each the month.  I've started affectionately calling it "Breakfast with Buffett".  My wife giggles when I say that - which makes me happy.

Has anyone been the the BH week in Omaha?  Might be a good roadtrip for me - and a good excuse to see my grandparents nearby.

We are going this year, got a free hilton hotel with points back in October.  DH's family has been going every year since it started, his grandfather was an early investor in BRK and that investment pretty much funded his business, and full retirement.  Instead of family reunions, they all just meetup in Omaha every year lol and they all LOVE going