No credit for gains any fool made
“There's no reason to do handsprings over 1995's gains. This was a year in which any fool could make a bundle in the stock market. And we did.”
Investing
Warren Buffett's 1995 letter to Berkshire shareholders, one of the letters in Berkshire Hathaway Shareholder Letters, 1971–2025.
Two ways to buy beat one
“[Berkshire's] double-barrelled approach - purchases of entire businesses through negotiation or purchases of part-interests through the stock market - gives us an important advantage over capital-allocators who stick to a single course.”
Size is the giant disadvantage
“The giant disadvantage we face is size: In the early years, we needed only good ideas, but now we need good big ideas.”
Most deals damage the acquirer's shareholders
“Rest assured, Charlie and I haven't lost our skepticism: We believe most deals do damage to the shareholders of the acquiring company.”
Seller projections entertain more than educate
“Specifically, sellers and their representatives invariably present financial projections having more entertainment value than educational value. In the production of rosy scenarios, Wall Street can hold its own against Washington.”
Weighing acquisitions against passive investments
“Our practice of making this comparison - acquisitions against passive investments - is a discipline that managers focused simply on expansion seldom use.”
Caring sellers bring fewer surprises
“For our part, we like dealing with owners who care what happens to their companies and people. A buyer is likely to find fewer unpleasant surprises dealing with that type of seller than with one simply auctioning off his business.”
A retailer is bought for its managers
“Buying a retailer without good management is like buying the Eiffel Tower without an elevator.”
In retailing, to coast is to fail
“Your competitor is always copying and then topping whatever you do. Shoppers are meanwhile beckoned in every conceivable way to try a stream of new merchants. In retailing, to coast is to fail.”
Owning as he wants to be owned
“Our basic goal as an owner is to behave with our managers as we like our owners to behave with us.”
With great managers, reports are almost unlimited
“My answer to [how many can report] is simple: If I have one person reporting to me and he is a lemon, that's one too many, and if I have managers like those we now have, the number can be almost unlimited.”
Economic castles protected by moats
“In business, I look for economic castles protected by unbreachable 'moats.'”
A bad reinsurance contract is like hell
“A bad reinsurance contract is like hell: easy to enter and impossible to exit.”
The good news takes care of itself
“At Berkshire, we believe in Charlie's dictum - 'Just tell me the bad news; the good news will take care of itself' - and that is the behavior we expect of our managers when they are reporting to us.”
Wealthy managers who work for love
“Many of our managers don't have to work for a living, but simply go out and perform every day for the same reason that wealthy golfers stay on the tour: They love both doing what they do and doing it well.”
The shareholders Berkshire wishes for
“What we wish for are shareholders of any size who are knowledgeable about our operations, share our objectives and long-term perspective, and are aware of our limitations, most particularly those imposed by our large capital base.”
Market overperformance cannot persist indefinitely
“The stock, in other words, has outperformed the business. That kind of market overperformance cannot persist indefinitely, neither for Berkshire nor any other stock.”
Managers he would name trustee
“When I say that I like to be associated with managers whom I would love to have as a sibling, in-law, or trustee of my will, Murph is the exemplar of what I mean.”