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When I heard the news last week, Warren Buffett decided to resign from his powerful Berkshire Hathaway Empire at age 94, which reminded me that he had been haunted by years of years.
It relates to the annual notice of great investors to Berkshire shareholders. For decades, they have been one of the most insightful, cheering and best reading documents in the financial world. It is cited endlessly. Collected in books. Very educational.
Buffett had the help. Financial journalist Carol Loomis edited the letter. Still, can many other financial heavyweights, with so many aides and so many resources, be able to repeatedly write annual letters that match Buffett? Certainly, many are perceptive. But why not develop the brevity, wit and humility that will make Buffett’s Missive successful?
I don’t think many people want to.
One of the great benefits of Buffett’s letters is the number of times he acknowledges or welcomes others to fill in a small army of Wall Street PR people and lawyers.
“From 2019-23, I used the words ‘mistake’ or ‘error’ in my letters to you 16 times,” he wrote in his latest letter in February.
In fact, he writes much longer about his “unforced errors”, stupid decisions, and costly mistakes. But here is a classic from 2021, and he said about “ugh 11 billion dollar fees” was due to Berkshire’s purchase of the 2016 Precision Castparts Manufacturing Group. “I paid too much,” he wrote, adding that this is “far from the first error of that kind, but it’s a big one.”
If you spend 60 years creating many of your shareholder billionaires, you might say that admission is easy. And for all his confessions, readers still could see that Buffett’s results were astounding.
However, it can also be said that fronting up to misstep can help explain its success. In any case, it breeds a level of trust that is not always given to the great and good of finance that gathers in Davos every year.
The latest annual letter from BlackRock’s Larry Fink is more typical of the careful fares offered to shareholders.
It starts with a touch of charm like Buffett. “Since 1976, when I showed up in my first Wall Street job (wearing long hair, turquoise jewelry, the most gli brown suit in the world), the investment has become much more fashionable (and thankfully so too, me).
Also, the Jargon is brilliantly free, and once the word “mistake” is displayed. But it mentions that what Fink is saying is not the mistakes he or his huge company may have made, but a repetition of the “historical mistakes” of the financial world of abundant capital deployed so narrowly.
Meanwhile, the latest shareholder letter from JPMorgan Chase’s Jamie Dimon has a section called “I made mistakes.” It reveals he underestimates the importance of cloud technology, referring to the case of a trader known as the London whale, who lost at least $6 billion in banks in 2012.
Alas, this section doesn’t reach the 53 pages of the document running on unacceptable 58 pages. Even Fink was able to contain his thoughts to 27 people this year. Buffett averaged just 17 pages over the past decade.
There is one CEO of a large global company.
It’s Andy Jassy from Amazon, who continued in the style of Jeff Bezos, which was replaced by founder Jassy in 2021.
Still, it is impossible to imagine any of these leaders writing lines that are as memorable as Buffett. Because even if they share his sense of humor, they don’t seem happy to show it.
My favorite line was in Buffett’s letter in 2007. “If a hyperopic capitalist had existed in Kitty Hawk, he would have given his successor a great favor by shooting Orville down.”
I also like his 1982 observation that “investments can always buy toads at the price of toads.” Other people.
However, it tends to end with his 2023 reminder that the 2023 investment winner can outweigh the disappointment. “When the flowers bloom, weeds become important,” he wrote. “And yes, it can start early and help you live in your 90s.”
