Berkshire Hathaway

Warren, Charlie, and Us: The Rights of Owners 
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The hallmark of our investment strategy is ownership of companies whose outlooks are favorable, in our view. A share of stock is a piece of the action: ownership of a fraction of an enterprise.

We own businesses in very old lines of work, like manufacturers of farm equipment. And companies in new lines of work, like cloud services. We are in software and chipmakers, miners and medicine.

Owners have rights. We elect directors. We receive our share of dividends paid. We get annual reports, and have the right to attend shareholder meetings. Most of us pay little attention to the trappings of corporate governance, with one exception.

Warren Buffett holds one of the largest annual shareholder meetings on the planet, with tens of thousands of people descending on Omaha for the festivities.

On the first weekend in May, information about Berkshire subsidiaries and products they offer is available at the meeting venue. You can buy everything from GEICO insurance to treats from Dairy Queen and learn about companies as diverse as Burlington Northern and Clayton Homes. Did we mention? Shareholders also get discounts at Nebraska Furniture Mart and Borsheims.

At the May meeting, Buffett and other key people will entertain questions from shareholders for hours, before conducting the business of the shareholder meeting. Some say that Buffett is among the most successful investors in the history of the world; at 94 years of age, there are only so many more chances to witness him at this event. (Charlie Munger, former vice chairman, passed away in 2023 at age 99.)

Clients, if you have an interest in being part of this, you’ll need shareholder credentials. In past years, there has been a postcard to order those included in the Annual Report, or you can let us know if we can help you obtain credentials. Stay tuned for more details in the weeks ahead.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Companies mentioned are for informational purposes only, and this communication should not be considered a solicitation for the purchase or sale of their securities.

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2024 edition: Warren, Charlie, and Us on the Rights of Owners – 228Main.com Presents: The Best of Leibman Financial Services

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Things Warren Buffett Never Said

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Warren Buffett may be the most famous investor in the world. The annual meeting of his company is known as ‘Woodstock for Capitalists,’ and is attended by 40,000 people. Countless articles, essays, and books have been written (including by us) about the things he has said.

As far as we know, nobody has ever written anything about things Buffett NEVER said. But here are our top three things Buffett never said:

1. “The stock went down, so I sold it.” Buffett knows the market goes up and down. He studies companies, not stock ticker symbols. When the fundamentals are in place, he buys. Then he holds. Then he holds some more. If the price declines, he typically buys more. This is what ‘buy low, sell high’ is all about.

2. “I’m waiting to invest until we get more economic data to clear up the uncertainty.” In his seven decades of investing, Buffett has noticed that uncertainty is always with us. He reads and studies ceaselessly, and when he finds something to buy, he buys it. Frequently, this turns out to be when the price is depressed because of temporary factors. Others are paralyzed by uncertainty when Buffett is taking action.

3. “A lot depends on what the Federal Reserve does next month.” Buffett has run his company for more than five decades, while seven different people held the chairmanship of the Federal Reserve Board, through innumerable cycles of Federal Reserve tightening and loosening. He can tell you what he paid for his stake in Coca Cola and when it was purchased. He probably cannot say what the Federal Reserve did at the meeting before, or the meeting after, the transaction. Why? Because it doesn’t matter in the long run.

Warren Buffett does not wear a halo. He is a human being and that means he makes mistakes. But he has made more money investing than any other human being on the planet. We think it pays to listen to the things that he has said. But there may be even more value in understanding the things he never said.

If you would like to discuss these concepts or your specific circumstances at greater length, please write or call.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. Stock investing involves risk including loss of principal.

Lessons in Letters: The Wisdom of Warren Buffett, Part 1

Downtown Omaha skylineWarren Buffett, the Oracle of Omaha, is a widely acclaimed investor and businessman. He is not perfect and he has been controversial at times. However, to our knowledge Buffett has made more money investing than any other human being on the planet. So he has that going for him, which is nice.

Almost 40 years’ worth of Buffett’s annual shareholder letters are available at www.berkshirehathaway.com. They provide a wealth of information on his views, methods, and insights. Some things from 1977 have gone away, like VHS tapes and KC & The Sunshine Band, but Warren Buffett’s letter for that year contains some timeless insights.

“Most of our large stock positions are going to be held for many years and the scorecard on our investment decisions will be provided by business results over that period, and not by prices on any given day.”

He goes on to write,

“We ordinarily make no attempt to buy equities for anticipated favorable stock price behavior in the short term. In fact, if their business experience continues to satisfy us, we welcome lower market prices of stocks we own as an opportunity to acquire even more of a good thing at a better price.”

Notice that his focus is on the business, not the stock. Buffett did not build his fortune by worrying about short term price swings. He considers his investments in terms of many years, not day to day prices. And he understands that the best way to build wealth for himself and his investors is to buy great companies at bargain prices. For Buffett, falling prices are a buying opportunity rather than a source of pain and anguish.

Buffett’s insight is remarkable in a market dominated by short-term trends—as are his results. There is a lot of wisdom in these words, and we will frequently return to Buffett’s letters as a source of guidance. In the meantime, like Buffett, we continue to seek the best bargains on the market and cultivate our investment “orchard” for long-term growth rather than trying to sell if for short-term reasons.

Investing involves risk including loss of principal. No strategy assures success or protects against loss.