Saturday, March 1, 2008

Warren Buffett's 2007 letter to Berkshire Hathaway shareholders highly anticipated

http://johnfenzel.typepad.com/john_fenzels_blog/images/warren_buffett_1.jpg
Warren Buffett's Legendary letters to Berkshire Hathaway shareholders
will be even more poignant in 2008. Investors around the world will be
looking for words of wisdom from "The Sage of Omaha" given the current
market and economic turmoil.


Berkshire Hathaway Annual Letter to Shareholders 2008 - Read the latest Berkshire Letter; out 28.02.09.

Berkshire Hathaway Annual Letter to Shareholders 2007




*letters going back to 1977 also available here


Warren Buffett's letters to Berkshire Hathaway shareholders(BRK-A) are legendary long winded things.

The release of today's letter in a few hours will be perhaps more anticipated than most. Market turmoil, credit crunches and the like will see investors flock to read what he might be doing at this time and where he might be heading and indeed where he sees the world economy going in the short to medium term.

These opus' of Buffetts generally run on for 20 pages or more but they usually contain more than their fair share of sage advice from the worlds most successful investor the world has ever seen.

I anticipate that he will see opportunity rather than negativity, as assets retreat in value and he can see these assets fall into his mantra of businesses as "value investments".

Berkshire had an investment gain of over US$12 billion dollars in 2007 and the share price over the last year increased from just over $100,000.00 to just over $140,000.00.

You can read the whole Warren Buffett letter here but I would just like to quote a very illuminating piece from its 21 very interesting pages:

" I made an even worse mistake when I said “yes” to Dexter, a shoe business I bought in
1993 for $433 million in Berkshire stock (25,203 shares of A). What I had assessed as durable competitive
advantage vanished within a few years. But that’s just the beginning: By using Berkshire stock, I
compounded this error hugely. That move made the cost to Berkshire shareholders not $400 million, but
rather $3.5 billion. In essence, I gave away 1.6% of a wonderful business – one now valued at $220 billion
– to buy a worthless business.

To date, Dexter is the worst deal that I’ve made. But I’ll make more mistakes in the future – you
can bet on that. A line from Bobby Bare’s country song explains what too often happens with acquisitions:
“I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.”

You wont find many CEO's detailing their mistakes in company reports, especially with such, candour, humour and a willingness to take responsibility for them.


Related Share Investor reading

Berkshire Hathaway Annual Letter to Shareholders 2008 - Read the latest Berkshire Letter
Berkshire Hathaway Annual Letter to Shareholders 2007
Warren Buffett 2007 Letter in Blog Format
Global market meltdown: What is Warren Buffett doing?
The Intelligent Investor: Book review

Related Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $10.74
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c Share Investor 2008