Berkshire Hathaway Letters to Shareholders, 2018

Berkshire Hathaway Letters to Shareholders, 2018

Posted by jack_miller | Published 7 months ago



With 224 ratings

By: Warren Buffett and Max Olson

Purchased At: $2

Warren E. Buffett first took control of Berkshire Hathaway Inc., a small textile company, in April of 1965. A share changed hands for around $18 at the time. Fifty-four letters to shareholders later, the same share traded for $306,600, compounding investor capital at just under 20% per year—a multiplier of 17,000 times.

This book compiles the full, un-edited versions of every one of Warren Buffett's letters to the shareholders from 1965 to 2018, including 1965-1976 letters not available on Berkshire's website. In addition to providing an astounding case study on Berkshire's success, Buffett shows an incredible willingness to share his methods and act as a teacher to his many students.

There are hundreds of books about Buffett's life, advice, and methods. These are his actual letters -- word for word -- a "lesson plan" of his views on business and investing. You can find most of the letters for free on Berkshire's website, but this compiles them into a well-designed, easily readable format.
Sure you can get the letters for free online, but the book is cheap and it was a convenient way for me to consume the information. A lot of the information in Warren Buffett's letters is naturally very contextual and I didn't feel bad when skipping over these outdated bits. Beyond those though, I found these letters to contain great gems. They are great food for thought for anyone who is running a business and who wants to generate more value. Anyone who wants to better understand the business models of the industries covered by Berkshire Hathaway, or simply curious about a specific great business mind.

More specifically for me: I'm a software engineer first and an entrepreneur second. After reading this book, I felt that I had a better grasp at what's important from a business perspective. It helped me ask better questions about my own businesses and to evolve from stating "this gadget is useful" to actually asking and figuring out how this will also generate financial value, can I create an economic moat, what will be the revenue profile? Steady, Cyclical, linear, exponential?

At 3 bucks, it's cheaper than a business major.

- melanie_hughes

This book is a good book, but one must study it a bit carefully. The book reveals much of the Berkshire-Hathaway methodology in picking stocks. Insight comes as one reads a good amount of the book and puts it together in your mind. I have been using the Kindle Flash Card Methodology to accumulate the ideas. Near 1969, one sees acquisition in media companies is made. Near 1992, one sees the reasons for the paper media valuation. One also learns to understand why business franchises exist. Media prior to the 1990’s seemed to have such a franchise. Reading the book helps the reader understand what makes a business valuable and what causes a business to dwindle in value.
By reading the book and putting the ideas together, one gains investing insight.
From a historical perspective, one can see many business events in the world and US and how these events impacted companies and their value. The oil shock and its impact on insurance business is seen. The issue of inflation and how it impacts business is seen. Many worries that are not fulfilled are seen.
All of this together makes the book a delight to read for business understanding. It helps a natural worrier understand how that most worries never get fulfilled. Some business understanding is useful to aid reading comprehension. A historical perspective is needed too.

- marlowe_watson

I believe it was Einstein who said (something to the effect of) “If you can’t explain it simply, you don’t understand it well enough”. Well, nobody explains investing as simply as Warren Buffet. His letters to the Berkshire Hathaway shareholders are a collection of his thoughts on investing over the years. It’s a bit like watching a biopic movie in which you see the making of a legend. And Buffet’s legend lies in making sense of the seemingly complex and intellectually taxing task of investing.
This is one of those books that should be read more than once. I did. And it’s easy to do so because of WB’s usual witty and colorful prose. If you’re an investor in any sense of the word, this is a must-read. I know that term “must-read” is thrown around a lot. But a first-hand account of the evolution of the investing philosophy of the most successful investor of the 20th century? Yes, that’s a must-read.

- charles_carter

Warren Buffett, of course, is a financial icon. This collection of annual shareholder statements provides intimate insight into the evolution of his financial, managerial and philosophical development. Naturally, it is highly redundant; there are lots of tables. Nevertheless, it evinces a giant of a man who confronts conflicts between profits and worker security, shareholder rights versus community wellbeing, and the tensions between hands-off managerial autonomy versus top-down authority--all revealed with marvelous, pithy, insightful senses of self-reflection and humor. It's certainly not for everyone; but it's hard to imagine how better to learn what it takes to become one of the world's richest men.

- dream_ramirez

Though I have an MBA from one of the best business schools in the world, I can say this book is an MBA. Seriously, you could build an entire MBA curriculum around the principles and processes he talks about in these shareholder letters. Those it's a cliche to say it should be "require reading", I think it should be required reading for aspiring business leaders.

- annalee_martin

If you read it carefully there are many useful tips for investors in this book. Patience and humility, a willingness to learn from mistakes, all this translates into Buffet's reputation as "the world's greatest investor"(which he would smile at, whilst wondering why other people are so dumb).

- edgar_evans

My review is for the letters from 1965-2015, so I have not yet purchased the latest through 2016. Nevertheless, the letters are absolutely insightful in many ways, as Mr. Buffett offers many investing nuggets via his shareholder meetings. I highlighted many of them on my eReader and transcribed them onto 8 pages of notes. These letters are as good as a graduate seminar in finance for anyone with an interest in investing, and especially an active investor in the equity markets.

- emma_smith

If you're an investor, you need this book. Keep reading the section in the 2011 Letter to Shareholders where Buffett talks about why he and Charlie hope IBM's stock price languishes for a few years. Read it over and over until it makes sense to you. When it finally sinks in, it will be as if you've earned a degree from Buffett College. An amazing collection from an amazing investor. These are all available for free on the Berkshire Hathaway website, but for three bucks? Come on... :)

- rudy_bailey

There are dozens of books about Warren Buffett’s investment strategy, and I’ve read most of them. Some of them are very good, and some are just piggybacking on the man. This book is simply the collection of his own writing: his letters to the shareholders of his investment company, Berkshire Hathaway. These aren’t the usual missives from senior management, but very carefully crafted words of wisdom from Buffett. All of his wisdom on investing and how to run a company is here. Don’t forget that Berkshire Hathaway is a holding company, owning part or all of a diverse set of businesses; Buffett has assembled these businesses, and allocates capital between them. He could be described as an expert asset allocator, investing profits generated by one company into others in his portfolio which may be able to use them more effectively.

If you’re a student of investment strategy, you can’t afford to ignore Buffett; and reading his letters to shareholders is the best way that you can study him. It’s a fascinating read.

If you want to invest like him, there are at least three ways you can do it:

1. Buy shares in Berkshire Hathaway.

2. Buy the same shares that he does, when he does. Men Faber describes how to do this in Invest With The House: Hacking The Top Hedge Funds.

3. Use his techniques to find companies in which to buy shares. Matt Kratter explains how to do this in Invest Like Warren Buffett: Powerful Strategies for Building Wealth.

- emory_wright

I read this as if it were the most gripping novel. I could hardly put it down. Without an accounting/business/mathematical back ground, much of the financial/accounting/tax language missed me by a mile. Don't think however that I didn't get anything from it. Buffet speaks with such simple honesty and clarity, that despite the factual 'business speak' I was genuinley moved to tears on several occasions by the towering integrity of the man. It has helped me as a trader so very much because it shines a light on how it is possible to be a top investor AND a decent human being.

I expect everyone wants tips from Buffet on how to succeed but he has helped me to truly believe you don't have to be an a**hole to be rich and successful - that has been standing in my way for a long time.

Whatever you want to learn from Buffet, it is probably all here in these annual snap shots, which read in one sitting, give a real feel for the man. No doubt, each person will look for and take away what they need from this collection - whatever you are seeking you will probably find it in there.

I found it a very illuminating and enjoyable read. I can't recommend it highly enough.

- haylee_ramos

Everest, K2 and Kangchenjunga are the 3 tallest mountain ranges out there. It is likely on the bucket list of many new and aspining climbers, working as a backdrop siren call as they hone their skills on lesser mounds.

Book lovers have their own list but this list can never be definitive since there can be no universal consensus on the what shoudl go into "the toughtest reads out there" book list. Each persons list, like the idea of utopia or hell, is personal and unique.

But odds are a 100 book list made by a lot of bibliophiles would likely contain gems like :
Finnegans Wake by James Joyce
Moby Dick by Herman Melville
Simulacra and Simulation by Jean Baudrillard
The Corrections by Jonathan Franzen
Infinite Jest by David Foster Wallace

These books are reputed to be very tough slogs and there is no definitive gurantee you will turn the last page and feel glad you dived in. In fact, chances are most of these books will be flung across the room well before the last chapter. A lot of them are wilting in bookshelves around the world waiting for a day when the owner inevitably bundles it into the charity Box for donation.

When I purchased 'Berkshire Hathaway Letters to Shareholders' on 15 November 2013 (for the pricy sum of £2.07) I was not sure what I was in for. All I knew was that I liked Warren's way of thinking and approach to business and investing and I wanted to read more from the man directly, not via a biographer or hired hand. I surely would have done a double take if my future self has told me I would take 865 days to finish this 1000 page plus book.

'Berkshire Hathaway Letters to Shareholders' is not a book really but a collection of annual letters written by Warren buffet, the legendary investor and 2nd richest man on Earth. Each year, he writes a letter to his shareholders telling them how well (or poorly) Berkshire Hathaway, the company he runs, did. So technically this books, containing 50 letters, from 1965 to 2015, took 50 years to 'write'. (Amazon automatically updated the kindle version with the letters of the last 2 years, after I purchased the book in 2013. Go Amazon!).

But then that is like saying "History is about important dates". 'Letters to Shareholders' is soooo much more than just a collection of letters. Through theese letters, Buffet talks about the wider investing and business world and touches on a lot of very interesting subjects, giving the reader a solid grounding on many helpful topics that can stand in as life lessons.

The book is especially splendid at educating the reader on 3 topics :

1. Investing : Over 50 letters (sermons?) Buffet eloborates on what being a value investor is all about and how to think like a smart investor. There are books explicitly dedicated to teaching you investing and fail at it while this book does in almost as an afterthought. Buffet talks at length on how to think about investing and then how to act on that thinking. This alone make this book worth the time needed to read it. I evy the young reader who finishes it before his 25th birthday. He is guranteed to have a literally richer life than he would otherwise have had, whatever his starting posiiton was weathwise.

2. Business : Berkshire Hathaway buys and oversees a boatload of companies and Buffet wades deep into what metrics matter when running a firm. There are many colleges around the world, esp in third world locations, offering dubious pricey lengthy MBA and Business Diplomas that fail to do in many years what this one little book does by itself : Give the reader a unbeatably thorough education in the basics of thinking like a CEO/Businessman.

3. Understanding Insurance : Berkshire Hathaway at its core is an Insurance Firm and as a Consulatnt currently embedded at one such firm, I could not have hoped for a more comprehensive overview on how to look into and understand the industry and the myriad operators it it. Insurance plays a very important part in most economies globally and the book gives the readers lessons on how to evaluate the health of the industry and a frim in it. Nothing comes close.

So yes, while it took me the better part of 30 months to finish this book, it was only because you should injest this book slowly and gradually to let the lessons and Buffet's wisdom sink in, like sand settling at the bottom of a lake. A beachread this book is most definetly not but you know what this book most definetly is for me personally : The Best £2.07 I ever spent.

So go on, jump in and climb this Everest. The view from the top is worth it.

- asher_collins

I downloaded this book after various recommendations (the last being from the Tim Ferriss podcast after yet another guest mentioned these letters)- and I'm glad I did. Firstly, I foudn the transition of Berkshire Hathaway from a textile mill company, to an investment organisation fascinating. But also what came across was Warren Buffet's genuine love of business, and his fascination with what makes a 'great' business.

- conor_davis

This is a very interesting book. I suppose it is all already in the public domain - but it is brought together here in a convenient package. It is interesting to see how Berkshire-Hathaway developed over the years. Warren's writing style is a lesson to every CEO - honesty, straightforwardness, and some humour.

- dana_flores

Love this book. It won't be everyone's cup of tea but I have learnt a huge amount about how Berkshire Hathaway operates and business in general. If you like reading company accounts and trying to understand a business from its reports, then good times, this is for you. One point to note, on my iPad version of Kindle, some of the tables don't align particularly well but if you can get past that, then double good times.

- mariana_ross

Great book.
Indispensable for any investor.
A bit long at times, but great overall.
Good sense of humour as well

- aminah_gray

I hoped that this book informed the reader how Berkshire Hathaway achieved greatness but alas it did not - a disappointment!

- eugene_wilson

The best book on Berkshires shareholders letter and lesson from the Oracle of Omaha.

- mae_turner

It does what it says on the tin, the book is merely a collection of all his letters. Nonetheless invaluable

- annabel_james

Warren's wisdom is beautifully distilled in this.

- philip_harris

Highly recommend to everyone to read, learn and implement.

- francesca_wright

Wealth of information from one of the best investment gurus. Listening from the horse's mouth is even better.

- maliah_clark

very good thank you

- jacqueline_mitchell

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