"Stock God" Warren Buffett's ** person.
It was finally announced last night.
From the first letter to shareholders in 1957.
Warren Buffett's communication with investors.
has become one.
A tradition that continues for more than 60 years.
Last night, Warren Buffett's letter to shareholders was released.
Warren Buffett, who is already 93 years old.
Write the 46th shareholder letter in your life.
Tribute to Munger. The letter begins with a short article in tribute to his late partner Charlie Munger, whom he calls Berkshire Hathaway's "designer" and himself the "general contractor" who brings Munger's vision to life day in and day out. In a sense, Munger is "like a brother and sometimes a loving father."
Warren Buffett said——
In the real world, people tend to associate great architecture with architects, and those who pour concrete or install windows are quickly forgotten. Berkshire has become a great company, I've always been in charge of architecture, and Charlie has always been Berkshire's designer.
Select ** person.
In the shareholder letter, Buffett clearly emphasized that Greg Abel is the first person in Berkshire. "Greg Abel is responsible for all of Berkshire's non-insurance businesses, and by all accounts, he's ready to become Berkshire's CEO tomorrow. Warren Buffett said.
Greg Abel Source: Sina Weibo.
Buffett also said in the letter that this year's shareholder meeting will be held on May 4 local time in Omaha. Due to Munger's passing, there will be only three people on the stage at this year's Berkshire shareholder meeting: Warren Buffett, Greg Abel, and Ajit Jain.
Explain the investment strategy.
A look back at 2023** investments.
Buffett mentioned Coca-Cola and American Express as usual. "In 2023, we have not bought or sold American Express or Coca-Cola**, but these two companies are once again rewarding our 'inaction' with their earnings and dividends," he said in the letter. ”
Buffett summed up the experience that these two ** brought to him, saying: "When you find a really great business, stick with it, and patience will pay off." A great business can counteract many mediocre decisions. ”
In addition, Buffett also talked about two "investments that are expected to be held indefinitely" - Occidental Petroleum and Japan's five largest trading houses. At the end of 2023, Berkshire owned 278%。"We particularly like the vast oil and gas resources that Occidental Petroleum has in the U.S. and its leadership in carbon capture initiatives. ”
However, he stressed that Berkshire has no interest in acquiring or managing Occidental Petroleum despite its current holdings.
Continued to hold five major Japanese trading companies.
The investment situation in Japan** occupies a large part of the letter. Berkshire's investment in Japan** began on July 4, 2019, and it now continues to hold positions in five large Japanese trading houses, namely Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.
After speaking with their management, we increased our holdings in all five companies last year. Berkshire now owns about 9 percent of each of the five companies. Berkshire also promised them that its stake would not exceed 9 in the future9%。Buffett believes that these five companies are very similar to Berkshire's own way of doing business, and they all have a high degree of diversity. At the same time, the policies of these companies are very shareholder-friendly.
"Since we started buying Japan**, each of these five companies has reduced its outstanding shares with an attractive **," he said. At the same time, the management of these five companies is far less aggressive in their own compensation than is typical in the United States. ”
In the letter, Buffett also revealed that it would take quite a bit of patience to open a position through a market open buy, given Berkshire's current size. "The process is like turning a battleship. This was an important disadvantage that we didn't face in Berkshire's early days. ”
He said Berkshire's total investment cost to the five companies is currently $16 trillion yen, while the year-end market capitalization of these five companies was 29 trillion yen. The yen has depreciated in recent years, with unrealized profits at the end of 2023 amounting to $8 billion in US dollars. However, the depreciation of the yen due to its large holdings of Japanese bonds also allowed Berkshire to earn $1.9 billion at the end of the year.
I made a costly mistake".
In the letter, Warren Buffett admitted that he would make mistakes: at Berkshire's annual conference in May 2023, Berkshire's insurance, rail and energy businesses will perform well. However, in fact, in addition to the still strong performance of the insurance business, the full-year revenue of both the rail and energy businesses decreased year-on-year in 2023.
Buffett explained: "Last year, the profit decline of BNSF Rail exceeded my expectations, and this was due to the decline in revenue. While fuel costs have fallen, wage growth in the U.S. has far exceeded the inflation target. Even though the BNSF rail carries a lot of cargo and outperforms any of the other five major railroads in North America, its profit margins are declining. ”
U.S. stocks are more like casinos.
Warren Buffett bluntly said in the letter-
Occasionally, there will be a noticeable mispricing of the ** and bonds of some large corporations with good fundamentals, as was the case for four months in 1914 and a few days in 2001.
If you think U.S. investors are more stable now than they were in the past, think back to September 2008.
Advances in communication technology have made instant paralysis possible around the world, and such sudden panics do not happen often, but they do.
Whatever the reason, the market is more like a casino now than it was when I was younger, and casinos now exist in many homes and are ** residents every day. ”