Investing
Warren Buffett's 2022 letter to Berkshire shareholders, one of the letters in Berkshire Hathaway Shareholder Letters, 1971–2025.
“We believe Berkshire’s individual holders largely to be of the once-a-saver, always-a-saver variety. Though these people live well, they eventually dispense most of their funds to philanthropic organizations.”
“The disposition of money unmasks humans. Charlie and I watch with pleasure the vast flow of Berkshire-generated funds to public needs and, alongside, the infrequency with which our shareholders opt for look-at-me assets and dynasty-building.”
“When large enterprises are being managed, both trust and rules are essential. Berkshire emphasizes the former to an unusual – some would say extreme – degree.”
“Disappointments are inevitable. We are understanding about business mistakes; our tolerance for personal misconduct is zero.”
“Our goal in both forms of ownership is to make meaningful investments in businesses with both long-lasting favorable economic characteristics and trustworthy managers.”
“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.”
“Capitalism has two sides: The system creates an ever-growing pile of losers while concurrently delivering a gusher of improved goods and services. Schumpeter called this phenomenon ‘creative destruction.’”
“It’s crucial to understand that stocks often trade at truly foolish prices, both high and low. ‘Efficient’ markets exist only in textbooks. In truth, marketable stocks and bonds are baffling, their behavior usually understandable only in retrospect.”
“Controlled businesses are a different breed. They sometimes command ridiculously higher prices than justified but are almost never available at bargain valuations. Unless under duress, the owner of a controlled business gives no thought to selling at a panic-type valuation.”
“Our satisfactory results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favors long-term investors such as Berkshire.”
“The lesson for investors: The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders.”
“Charlie and I focus on [operating earnings] and urge you to do so as well. The GAAP figure, absent our adjustment, fluctuates wildly and capriciously at every reporting date.”
“Alleghany delivers special value to us because Berkshire’s unmatched financial strength allows its insurance subsidiaries to follow valuable and enduring investment strategies unavailable to virtually all competitors.”
“With disciplined underwriting, [insurance float] have a decent chance of being cost-free over time.”
“Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose.”
“It requires no talent to manipulate numbers: Only a deep desire to deceive is required. ‘Bold imaginative accounting,’ as a CEO once described his deception to me, has become one of the shames of capitalism.”
“America would have done fine without Berkshire. The reverse is not true.”
“We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses.”
“Our CEO will always be the Chief Risk Officer – a task it is irresponsible to delegate.”
“Though economists, politicians and many of the public have opinions about the consequences of [Treasury spending exceeding taxes], Charlie and I plead ignorance and firmly believe that near-term economic and market forecasts are worse than useless.”
“Our job is to manage Berkshire’s operations and finances in a manner that will achieve an acceptable result over time and that will preserve the company’s unmatched staying power when financial panics or severe worldwide recessions occur.”
“Huge and entrenched fiscal deficits have consequences.”
“At Berkshire we hope and expect to pay much more in taxes during the next decade. We owe the country no less: America’s dynamism has made a huge contribution to whatever success Berkshire has achieved – a contribution Berkshire will always need.”
“Despite our citizens’ penchant – almost enthusiasm – for self-criticism and self-doubt, I have yet to see a time when it made sense to make a long-term bet against America.”
“The world is full of foolish gamblers, and they will not do as well as the patient investor.” — Charlie Munger
“If you don’t see the world the way it is, it’s like judging something through a distorted lens.” — Charlie Munger
“All I want to know is where I’m going to die, so I’ll never go there. And a related thought: Early on, write your desired obituary – and then behave accordingly.” — Charlie Munger
“If you don’t care whether you are rational or not, you won’t work on it. Then you will stay irrational and get lousy results.” — Charlie Munger
“Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.” — Charlie Munger
“You can learn a lot from dead people. Read of the deceased you admire and detest.” — Charlie Munger
“Don’t bail away in a sinking boat if you can swim to one that is seaworthy.” — Charlie Munger
“A great company keeps working after you are not; a mediocre company won’t do that.” — Charlie Munger
“Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.” — Charlie Munger
“If you keep making something more valuable, then some wise person is going to notice it and start buying.” — Charlie Munger
“There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero.” — Charlie Munger
“You have to keep learning if you want to become a great investor. When the world changes, you must change.” — Charlie Munger
“I will add to Charlie’s list a rule of my own: Find a very smart high-grade partner – preferably slightly older than you – and then listen very carefully to what he says.”