Yesterday Berkshire Hathaway released its Annual Report and amongst the standard numbers and forecasts livest the wisdom of Warren Buffett “Oracle of Omaha.” I have plucked a few for reference as if you ever get a chance to read Buffett he provides some of the most profound guidance without direction one can find.
On future acquisitions (p. 5):
With the acquisition of Van Tuyl, Berkshire now owns 91⁄2 companies that would be listed on the Fortune 500 were they independent (Heinz is the 1⁄2). That leaves 4901⁄2 fish in the sea. Our lines are out.
On experience investing (p. 6):
“I’ve mentioned in the past that my experience in business helps me as an investor and that my investment experience has made me a better businessman. Each pursuit teaches lessons that are applicable to the other. And some truths can only be fully learned through experience.”
Buffett citing a Peter Arno’s cartoon (p. 6):
There are certain things that cannot be adequately explained to a virgin either by words or pictures.
It never hurts to always advertise (p. 10):
Indeed, at least 40% of the people reading this letter can save money by insuring with GEICO. So stop reading and go to geico.com or call 800-368-2734.
On making investment mistakes (p. 15):
I have not, nonetheless, made my last mistake in purchasing either businesses or stocks. Not everything works out as planned.
The definition of investing quoted from 2011 annual report (p. 18):
the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power – after taxes have been paid on nominal gains – in the future.
About unsolicited offers (p. 23):
We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels.
On CEO lessons on business valuations in acquisitions (p. 27):
The intrinsic value of the shares you give in an acquisition must not be greater than the intrinsic value of the business you receive.
About asking Wall Street for investing advice (p. 31):
But sitting tight is seldom recommended by Wall Street. (Don’t ask the barber whether you need a haircut.)