Telling shareholders what we would want told
“Generally, we are trying to improve our annual letter to shareholders each year so as better to disclose the things we would want to be told if the roles were reversed and we were passive investors.”
Business
Stakes without control sharpen capital decisions
“We think the rationality of use-of-capital decisions is improved when the repertoire of a corporate manager includes purchases of business interests which do not augment the number of people to whom the manager can give orders.”
Inflation leaves many businesses without cash
“Many businesses, once good investments when inflation was low, are now, under inflationary conditions, unable to produce much, if any, cash even when physical volume is constant.”
One year's return means little
“The percentage return figure for any one year is not very significant, although the average figure over a period of years, and the trend in such average figure, are of vital importance.”
Inflation as a tax on shareholders
“Inflation is a very effective form of indirect taxation on capital represented by holdings of common stock. We know of no adequate countermeasure, generally available to corporate managers who wish to protect shareholders, to this form of indirect taxation.”
New stock gives more value than it gets
“With rare exceptions American corporations now cannot get as much intrinsic value as they give when new common stock is issued.”