Every year, Warren Buffett writes an annual shareholder letter, which includes information about Berkshire’s operations, profits, and losses for the last year as well as more than a little of his own personal humor, wisdom, and insight. Reading Buffett’s shareholder letters is a great way to not only get a glimpse into the mind of the Oracle of Omaha, but also learn more about his company.
However, while Buffett has been writing the shareholder letters since around 1965 and all the letters from 1977 through the present are available for free online, reading more than 50 letters isn’t something that we all have time to do. While we’ve been slowly going through and writing a summary of Berkshire Hathaway shareholder letters, there are five that absolutely everyone should read.
In 1977, Berkshire Hathaway’s failing bottom line was beginning to stabilize and the diversification that the company is known for was well underway. This letter highlights some really interesting ideas on how Buffett measures success in a company, his thoughts on management, and some other economic and business information
This was a huge year for Berkshire Hathaway as it merged with Blue Chip Stamps and purchased the majority in Nebraska Furniture Mart. This letter features some great explanations of “economic goodwill” and how Buffett takes that into account when acquiring companies.
This year, Berkshire Hathaway’s insurance segment saw some major problems, and Nebraska Furniture Mart continued to make some fantastic profit for the company. This letter, in addition to a lot of glowing remarks about Nebraska Furniture Mart, has an interesting glimpse into how Buffett reacts when he makes a mistake—something we could all learn form.
A tumultuous year for America, Berkshire Hathaway’s insurance companies saw some major losses this year—the largest since 1984, in fact—after the destruction on September 11. This letter features a lot of information about the insurance companies that make up a large portion of Berkshire Hathway and provides an interesting look into how an event like the World Trade Center attacks effects everyone across the board.
As the onset of the Recession that caused both the stock market and the economy in general to crash, this year was very difficult for Berkshire Hathaway (and every American company, really). However, that doesn’t stop Buffett from some silver lining, and also provides an interesting look into how one of the greatest investors in the world handled one of the worst economies and falls of our generation. This one is certainly worth a read.