45 Years of Berkshire/Buffett Quotes – Now Updated to Include 2022’s Letter
Continuing an annual tradition here on Begin To Invest, I added Buffett’s 2022 letter to the compilation of quotes from each year of Buffett’s letters to Berkshire Hathaway shareholders.
My selection includes some words of wisdom, stories of success, and even a joke or two. In the end just these selected quotes make up over 5500 words! It is amazing to watch history unfold from year to year and just think of what Buffett and Munger have seen over the last 50 years….wars, inflation, stock market crashes etc. And yet, his first letter in 1977 could easily be mistaken for something you heard him say on the TV today.
William Thorndike – Author of “The Outsiders” – 2 Qualities that Make a Great CEO
I first heard of the book “The Outsiders” in Berkshire Hathaway’s 2012 letter to shareholders. And who is going to ignore a book that Buffett calls “outstanding!”?
The book goes in detail on 8 different CEOs who excelled at creating exceptional long term returns for shareholders. In fact, the average returns of these companies’ shares outperformed the S&P 500 by a factor of 20 – every $10,000 invested in these companies was worth $1.5 million 25 years later.
What’s their secret? And how can we use those lessons to find today’s great CEOs?
At the time Warren’s investing style, taught by Ben Graham, was to look for “cigar butt” stocks – stocks that were dirt cheap, but provided a “free puff” to investors willing to make the investment. Berkshire certainly could have filled that criteria, here is how Buffett tells the tale:
Infographic: What Stocks Do The Most Successful Investors Hold?
What stocks do Warren Buffett, Carl Ichan, George Soros and other billionaires own? Here is a great infographic I saw on WalletHub:
How can you find this information in the future, or for other investors? Read below. [continue reading…]
Investing Based on a Company’s Net Income is Probably Not the Best Idea
It’s earnings season again, which means you are probably staring at a company or two in your portfolio that have seen their share price take a dive after reporting “disappointing” earnings.
You are not alone.
Here was the news the other morning after Warren Buffett’s Berkshire Hathaway reported earnings:
Sounds bad right? Profit (Net Income) is down by a sizeable margin year over year for Berkshire.
Does this mean it is time to say goodbye to the all-star investor?
From those headlines it may seem so. But there is a lot more to a company’s financials than that headline earnings number. (Read to the end and find out how Buffett really measures the success of his businesses.) [continue reading…]
Lunch with Warren Buffett (New Interview)
Buffett sat down with David Rubenstein the other day for a great interview: [continue reading…]
The Evolution of a Super-Investor — John Maynard Keynes
Keynes may be the most famous name in all of economics. The term “Keynesian Economics” still fills headlines today as global financiers look for ways to restart economic growth.
But what you may not have known is that the same Keynes that created Keynesian Economics, is also responsible for some of the earliest thoughts on value investing, diversification and behavioral finance. [continue reading…]
Buffett’s 5 Tips for Long Term Investing Success
CNBC had Warren Buffett on this morning (The first business day after his latest Letter to Shareholders), and he did not disappoint. Here was one of my favorite clips I saw:
Warren Buffett’s 5 tips for long term investors (Quotes below):
Begin To Invest Daily – February 14th – Romantic Investors, 1933 Michigan Bank Holiday
Quote of the Day:
Buffett on Romance:
This Day in History:
Best February 14th in S&P 500 History:
Year 2003 – S&P 500 up 17.52 points, or 2.14%
Worst February 14th in S&P 500 History:
Year 1980, S&P 500 down 1.45%
1933 – At 1:32 AM on a Tuesday morning, Governor William Comstock of Michigan declares a 8 day banking holiday as Michigan banks struggle to remain open. In the midst of the great depression banks nationwide were stressed, but Michigan was hit particularly hard by the great depression. After failed negotiations with Henry Ford for help, the governor was forced to declare a banking holiday to prevent defaults. However the banks would not open in just 8 days. Banks in many other states were not in any better condition than those in Michigan. By early March, 36 states had banking operations suspended.
Then on March 6th, just 36 hours after being sworn into office, President Roosevelt declared a week long national bank holiday. Over the next week panic would subdue and with the help of legislation from congress, the worst of the bank runs would be over.
Happy 4th of July weekend! Hope you are enjoying the weekend and have some extra time to sit back and learn.
This weekend’s readings and watching covers Charlie Munger’s advice to new grads, 4 investing tips from a “mini-Berkshire” investment officer, Greece’s crisis, and more! [continue reading…]
How Much is TOO Much to Pay for a Wonderful Company? A Look at a Current Great Business, and Buffett’s Past Purchases
One of the more famous investment quotes, which represents a mindset that has created one of America’s most valuable companies, from one of the most successful investors of all time:
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett
And that got me thinking…At what price did Buffett purchase some of his “wonderful” businesses and how does that compare to some “wonderful” stocks today? And what is considered a “fair” price? [continue reading…]
Chart of the Week: How Buffett’s Wealth has Grown Over Time – The Power of Compounding Interest
Buffett says that compounding interest is one of the main reasons he is where he is today. In our Chart of the Week, we look at his journey in detail. From his first $120 saved from selling packs of gum and coca colas in 1942 to his $72 billion today. [continue reading…]
Read of the Year: Buffett and Munger Come Together for Berkshire’s 50th Anniversary Shareholder Letter
The release of Warren Buffett’s annual letter to shareholders is always a special occasion, but this year’s is extra special. 2015 marks the 50th year that Warren Buffett has owned Berkshire Hathaway, and in celebration Buffett and his vice chairman, Charlie Munger got together to make sure this year’s letter was stuffed with nuggets for investors. So without wasting any more time, here is the best investing advice you will ever get: [continue reading…]
Quote of the Week: Buffett on Black Monday, October 19th 1987
This week marks the anniversary of the 1987 stock market crash, the largest single day percentage drop in history. The Dow Jones Industrial Average dropped 508 points, more than 22% (equivalent to a 3,200 point drop today, with the Dow at about 16,400).
Just how bad was the 1987 crash? If you missed our twitter posts from early this week, here are some screenshots from a few newscasts the night of October 19th, 1987: [continue reading…]
Weekend Reading – 10/19/14
Here are some articles that caught my attention over the last couple of weeks. Topics include: How to spend $208 billion, why equity investors deserve a higher return, why you should have a beer tonight, and more [continue reading…]
Chart of the Week: Market Declines Can Be a Huge Benefit for Long Term Investors
This week we are looking into the idea of stock market sell offs being a GOOD thing.
But why would anyone actually cheer for market sell offs? Doesn’t anyone who owns stocks want them to go up?
Here is why those of you with decades left to invest should be getting on your knees and praying for cheaper shares. [continue reading…]
Quote of the Week: Why are Consistent Earnings so Important?
All of a sudden it is pretty apparent that the stock market has moved a long ways from the recession of 5 years ago.
Today, OpenTable, with a net income of $33 million is being purchased by Priceline for $2.6 billion. Facebook, is now worth nearly $200 billion, twice the value of McDonalds despite having just one fourth of McDonald’s profits. And Tesla Motors is worth $33 billion – exactly half the value of Ford, despite selling just 22,400 cars in 2013. (To put that in perspective, that is how many F-150 pick up trucks ford sells in about 2 weeks, and is less than 1% of the total number of vehicles that ford sold in 2013).
Investors have one thing in mind when paying these exceedingly high prices – The prospects of future growth.
Neither of the companies mentioned above have the fundamentals to back up their sky high valuations, but that doesn’t seem to be stopping investors from dreaming.
The potential money to be made “finding the next google” will always blur an investor’s vision. Dreams of money to be made are like the beer goggles of the investment world – Investors immediately begin to make assumptions and ignore obvious risks for a chance to get lucky.
But, one day these investors will wake up and ask themselves “What the hell did I invest in?” [continue reading…]
Throwback Thursday: A look at Buffett’s 1988 investment in Coca-Cola
Buffett began purchasing Coca-Cola (Ticker: KO) shares in 1988. Today, Buffett has over $13 billion in gains from his investments in Coca-Cola alone.
With hindsight, it is always easy to say Buffett’s investment in Coca-Cola was anything short of genius, but at the time Coca-Cola was facing concerns over maintaining market share and its ability to grow.
However, Buffett recognized that Coca-Cola had a strong brand name, very consistent history of earnings, shareholder return and low debt. It has been a wild 26 year ride for Buffett, but the returns have been staggering!
At the time of Buffett’s initial purchase of Coca-Cola shares, its market cap was about $18.5 billion. Coca-Cola then had Revenues of $8.3 billion, a cash pile of $1.2 billion, a net income of about $1 billion and about $4.4 billion in retained earnings.
Buffett purchased about $1.3 billion in Coca-Cola initially, or about 7% of the company. Today his total Coca-Cola stake is worth over $15 billion, and pays him about $490 million in dividends each year! Incredible returns off of a $1.3 billion initial investment!
But its always easy to quickly glance over the last 26 years. The truth is that it took some major cahones to hold anything over the last 26 years.
Would you have been able to overlook the short term negative outlook for Coca-Cola in 1988?
Would you have had the confidence to hold through a 50%+ drop from its 1998 highs to 2004 lows? Or weather the 2008 decline?
Evaluating Stocks with a Competitive Advantage – Warren Buffett’s Concept of an “Equity/Bond”
When a company’s earnings are so solid and so predictable, investors are able to think of their stock like a variable fixed income security, like a bond with flexible rates. Here is how investors like Buffett evaluate these special companies. [continue reading…]