Jul 21, 2023
Warren Buffett’s annual letter in 1985 noted, “We believe good performance should be rewarded whether Berkshire stock rises, falls, or stays even. Similarly, we think average performance should earn no special rewards even if our stock should soar”.
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Several individuals find it arduous to resist the temptation of checking the price many times a day. In this context, Warren Buffett’s annual letter in 1996 made an interesting point. He said: “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes”
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Warren Buffett’s annual letter in 1983 notes that: “I was taught to favour tangible assets and to shun businesses whose value depended largely upon economic goodwill. This bias caused me to make many important business mistakes of omission, although relatively few of commission.”
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Warren Buffett’s annual letter of 2017 noted: “Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics, or a familiarity with Wall Street jargon”.
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Warren Buffett’s annual letter in 1986 noted: “if there’s a lot of technology, we won’t understand it”. On the contrary, this doesn’t mean Buffett was inflexible concerning technology.
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In Warren Buffett’s annual letter, 2014, he noted: “At Berkshire, we prefer owning a non-controlling but substantial portion of a wonderful company to owning 100% of a so-so business. It’s better to have a partial interest in the Hope Diamond than to own all of a rhinestone”.
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Warren Buffett’s annual letter in 2005 noted, “Long ago Sir Isaac Newton gave us three laws of motion. It’s a genius work but Sir Isaac’s talents didn’t extend to investing.
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Warren Buffett’s annual letter, in 2017, illustrated this point as well. He showed the four major dips Berkshire stock had suffered in its history. The dips witnessed price falling by 37% or more in a span of just a few weeks.
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The compounding nature of time and returns are best described in Warren Buffett’s annual letter of 1989. He said, “time is a friend for wonderful businesses and an enemy for the mediocre ones”.
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“Our aversion to leverage has dampened our returns over the years. But Charlie and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don’t need,” he writes.
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