Stocks owned for business performance
“Please note particularly that we own publicly-traded stocks based on our expectations about their long-term business performance, not because we view them as vehicles for adroit purchases and sales.”
Business
Reporting as if the roles were reversed
“Our position carries with it the responsibility to report to you what we would like to know if we were the absentee owner and you were the manager.”
Equal treatment rules out private briefings
“Our policy is to treat all shareholders equally. Therefore, we do not hold discussions with analysts nor large institutions.”
Durable advantages and a first-class CEO
“Whatever our form of ownership, our goal is to have meaningful investments in businesses with both durable economic advantages and a first-class CEO.”
Markets occasionally offer wonderful businesses cheaply
“One advantage of our common-stock segment is that – on occasion – it becomes easy to buy pieces of wonderful businesses at wonderful prices. That shooting-fish-in-a-barrel experience is very rare in negotiated transactions and never occurs en masse.”
Berkshire's success depended on its American home
“Our country would have done splendidly in the years since 1965 without Berkshire. Absent our American home, however, Berkshire would never have come close to becoming what it is today.”
Sticky float permits long-term investing
“Of equal importance, float is very sticky. Funds attributable to our insurance operations come and go daily, but their aggregate total is immune from precipitous decline. When it comes to investing float, we can therefore think long-term.”
Never dependent on the kindness of strangers
“We want your company to be financially impregnable and never dependent on the kindness of strangers (or even that of friends).”
Cash-heavy periods are never permanent
“[Cash-heavy periods] are never pleasant; they are also never permanent.”
Well-priced buybacks most surely add value
“When the price/value equation is right, [repurchasing Berkshire shares] is the easiest and most certain way for us to increase your wealth.”
Overpaying for your own shares destroys value
“We don’t want to overpay for the shares of other companies, and it would be value-destroying if we were to overpay when we are buying Berkshire.”
The orangutan effect of explaining ideas
“Charlie calls [teaching to clarify thoughts] the orangutan effect: If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will yourself exit thinking more clearly.”
Work you would pick without needing money
“I have urged that [university students] seek employment in (1) the field and (2) with the kind of people they would select, if they had no need for money.”