[Reading Buffett] 2021

When TTI’s founder was considering a sale, Berkshire was preferred over competitors and other financial buyers, as Berkshire won’t cut back-end jobs and won’t be a reseller.

“Teaching, like writing, has helped me develop and clarify my own thoughts.” – totally agree.

 

 

[Reading Buffett] 2020

Berkshire’s structure – “Although our form is corporate, our attitude is partnership.”

There are two different type of individual investors with Berkshire – those own and trade stocks, and those “who simply trust us to represent their interests, whatever the future may bring”.

Berkshire has become the No.1 owner of US PP&E. The runner-up is AT&T.

[Reading Buffett] 2018

One source of funding or leverage Berkshire has is deferred tax liabilities, which is a interest rate free loan. Those rose from unrealized gains and accelerated depreciation.

In the next annual letter, Buffett will not list book value per share any more; instead, the per share market value will be compared vs. S&P 500.

[Reading Buffett] 2017

Redefining risk-free: “risk-free” long-term bonds in 2012 were a far riskier investment than a long-term investment in common stocks, as

investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. “Risk” is the possibility that this objective won’t be attained.

Another lesson from Buffett – stick with big, “easy” decisions and eschew activity.

[Reading Buffett] 2016

For certain stocks, Buffett has no intention to sell, however, those are still considered “available for sale” stocks.

Buffet’s tax lesson on dividends – “For a non-insurance company – which describes Berkshire Hathaway, the parent – the federal tax rate is
effectively 101⁄2 cents per $1 of dividends received. Furthermore, a non-insurance company that owns more than 20% of an investee owes taxes of only 7 cents per $1 of dividends. That rate applies, for example, to the substantial dividends we receive from our 27% ownership of Kraft Heinz, all of it held by the parent company.”

Buffett compared results of HFs vs. S&P 500 over the past 9 years. On average S&P 500 won.

[Reading Buffett] 2015

Berkshire added the sixth “powerhouse”, which is Precision Castparts Corp for manufacturer aerospace components.

Haha I liked this quote – “utility was the only business that would automatically earn more money by redecorating the boss’s office”.

When technology changes “destroyed” some industries, what to do? Buffett suggested a better safety net for those “who are willing to work but find their specific talents judged of small value because of market forces. “. Well said I think.

 

[Reading Buffett] 2014

Buffett added a new column for the “market” value of Berkshire’s share. This is important as “cost-based carrying value” was never revalued up. Thus, over time “the gap between Berkshire’s intrinsic value and its book value has materially widened”.

“a business with terrific economics can be a bad investment if it is bought for too high a price”.

Buffett recognized the investment failure in Tesco, and said he should have exited earlier.

[Reading Buffett] 2013

Berkshire purchased both preferred shares and common shares of Heinz, partnering with 3G Capital. Buffett touted the partnership as a new model of investing, and says the difference between Berkshire and private equity firms is that “Berkshire never intends to sell a share of the company”.

“Games are won by players who focus on the playing field – not by those
whose eyes are glued to the scoreboard.” – focus less on current prices.

Buffett also sent a warning to the pension systems/policies of public entities.