{"id":12730,"date":"2012-02-29T16:28:43","date_gmt":"2012-03-01T00:28:43","guid":{"rendered":"https:\/\/mikeindustries.com\/blog\/?p=12730"},"modified":"2016-05-25T23:34:25","modified_gmt":"2016-05-26T06:34:25","slug":"choice-quotes-from-the-2011-berkshire-hathaway-annual-report","status":"publish","type":"post","link":"https:\/\/mikeindustries.com\/blog\/archive\/2012\/02\/choice-quotes-from-the-2011-berkshire-hathaway-annual-report","title":{"rendered":"Choice Quotes from the 2011 Berkshire Hathaway Annual Report"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" src=\"\/blog\/images\/inline\/buffett2.jpg\" alt=\"\" width=\"450\" height=\"132\" class=\"border\" \/><\/p>\n<p>I&#8217;ve been a Berkshire Hathaway fan since I was in 6th grade, and like many others, I always look forward to reading their <a href=\"http:\/\/www.berkshirehathaway.com\/letters\/2011ltr.pdf\" target=\"_blank\">annual report<\/a>. It&#8217;s amazing that in the 46 years since Warren Buffett took over management of the company, there hasn&#8217;t been a single major down year for investors to fret about. When the S&#038;P shed 9%, 12%, and 22% during the three-year dot-com 1.0 bust, Berkshire&#8217;s book value was up about 10%. During the 2008 financial crisis, the S&#038;P dropped 37% while Berkshire only lost 9.6% (their worst year ever). Every Berkshire annual report is written in plain English and provides indispensable advice for all levels of investors, but there are always a handful of choice quotes that really make me proud to put a few pennies where Warren Buffett puts his. Among my favorites from <a href=\"http:\/\/www.berkshirehathaway.com\/letters\/2011ltr.pdf\" target=\"_blank\">this year&#8217;s report<\/a> include:<\/p>\n<ul>\n<li>&#8220;More than 98% of my net worth is in Berkshire stock, all of which will go to various philanthropies.&#8221;<\/li>\n<li>&#8220;About 95% of &#8230; (our companies&#8217; capital investments)&#8230; were made in the U.S., a fact that may surprise those who believe our country lacks investment opportunities. We welcome projects abroad, but expect the overwhelming majority of Berkshire&#8217;s future capital commitments to be in America. In 2012, these expenditures will again set a record.&#8221;<\/li>\n<li>&#8220;People may postpone hitching up during uncertain times, but eventually hormones take over. And while &#8216;doubling-up&#8217; may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure.&#8221;<\/li>\n<li>&#8220;We now have eight subsidiaries that would each be included in the Fortune 500 were they stand-alone companies. That leaves only 492 to go. My task is clear, and I&#8217;m on the prowl.&#8221;<\/li>\n<li>&#8220;The first law of capital allocation \u2013 whether the money is slated for acquisitions or share repurchases \u2013 is that what is smart at one price is dumb at another.&#8221;<\/li>\n<li>&#8220;There are a lot of ways to lose money in insurance, and the industry is resourceful in creating new ones.&#8221;<\/li>\n<li>&#8220;If something&#8217;s not worth doing at all, it&#8217;s not worth doing well.&#8221;<\/li>\n<li>&#8220;Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965.&#8221;<\/li>\n<li>&#8220;(A cube of) 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.&#8221;<\/li>\n<\/ul>\n<p>&#8230; and the most profound passage of the entire report:<\/p>\n<ul>\n<li>&#8220;Today, IBM has 1.16 billion shares outstanding, of which we own about 63.9 million or 5.5%. Naturally, what happens to the company&#8217;s earnings over the next five years is of enormous importance to us. Beyond that, the company will likely spend $50 billion or so in those years to repurchase shares. Our quiz for the day: What should a long-term shareholder, such as Berkshire, cheer for during that period? I won&#8217;t keep you in suspense. We should wish for IBM&#8217;s stock price to languish throughout the five years.&#8221;<\/li>\n<\/ul>\n<p>That last bit is why no casual investor (and even many professional ones) should ever think they know even half as much about investing as Warren Buffett. For a compelling, uplifting take on where the U.S. economy might be headed, be my guest and <a href=\"http:\/\/www.berkshirehathaway.com\/letters\/2011ltr.pdf\" target=\"_blank\">read the rest<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I&#8217;ve been a Berkshire Hathaway fan since I was in 6th grade, and like many others, I always look forward to reading their annual report. It&#8217;s amazing that in the 46 years since Warren Buffett took over management of the company, there hasn&#8217;t been a single major down year for investors to fret about. When [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[41,282],"tags":[],"class_list":["post-12730","post","type-post","status-publish","format-standard","hentry","category-business","category-original"],"_links":{"self":[{"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/posts\/12730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/comments?post=12730"}],"version-history":[{"count":0,"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/posts\/12730\/revisions"}],"wp:attachment":[{"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/media?parent=12730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/categories?post=12730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mikeindustries.com\/blog\/wp-json\/wp\/v2\/tags?post=12730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}