20240225 A brief interpretation of Warren Buffett's latest letter to shareholders in 2024.
Warren Buffett's latest letter to shareholders came, and Berkshire's full-year net profit for 2023 was $96.2 billion, far exceeding market expectations, which were originally expected to be $40.8 billion. In the fourth quarter, Berkshire had $167.6 billion in cash reserves, strong cash assets, and a very thick safety cushion for the company. Since entering 2024, the company's stock price has risen from about $540,000 to about $630,000, an increase of nearly 17%.
1. Warren Buffett's latest evaluation of the "circle of competence" and "margin of safety".
In his letter to shareholders, Warren Buffett said: "There are only a handful of companies in this country that can really drive Berkshire's growth, and we and others continue to choose them. Some we can value, some we can't. And, if we can, they have to be attractive.
This is Warren Buffett's latest assessment of the "circle of competence" and "margin of safety". Nuoda is the largest in the United States, and it is a long cattle market, and there are not many companies that can enter the eyes of his old man, maybe less than ten, or less than five. Outside the circle of competence, it is not something he has to consider.
The idea of "margin of safety" is embodied in two aspects: one is based on the "circle of competence", and "what you understand" is the safest; The other is that "** must be attractive", * to be discounted, not only can not "chase high", even "reasonable" is not attractive, only "discounted" is attractive and margin of safety.
2. Warren Buffett's implicit criticism of "casino sentiment" in the market.
Warren Buffett commented on the current **. While the market is much larger than in our early years, today's active participants are neither emotionally stable nor better educated than I was in school. Whatever the reason, the market now behaves more like a casino than it did when I was younger. Casinos now exist in many homes, and they are ** residents every day.
I'm also starting to wonder why most people don't want to take a path that has proven to be good. Not being able to resist ** is definitely an important factor. In the face of a close **, it is easy for people to ignore the probability and cost behind it, thinking that they are extremely smart people and the lucky ones in the world.
Warren Buffett also implicitly mentioned that the current U.S. ** may be overvalued, and most of the time when the speculative atmosphere is heavier, everyone pays attention to the "market dream rate", and the evaluation of corporate profits and stock prices is also a simple linear extrapolation. Risks are always hidden in the corners that people ignore, and bull markets always make people ignore the pitfalls for fear of missing opportunities.
Third, there are not many good opportunities.
Buffett said that thanks to the power of American-style tailwinds and compound interest, if you make a few good decisions in your life and avoid making serious mistakes, we are in a field that has been and will be very rewarding.
There aren't many really, good investment opportunities. It is the best choice to choose a good company and accompany it to grow (compound interest) with the right patience.
Pay attention to compound interest, compound interest is often because the initial amount is small, and it needs to be calculated in annual time units, which is also an important reason why many people dislike it.
Hoping to get rich overnight, not wanting to get rich slowly, this is a common problem of people. Doing a good job of investing can only overcome these "common problems", which is indeed a bit anti-human.
Fourth, the selection of the company's first person.
Warren Buffett announced the "best man" in the shareholder letter, and Vice Chairman Greg Abel is ready in every way to take on the role of CEO of Berkshire Hathaway tomorrow. This is Buffett's responsibility to the company and all shareholders.
Warren Buffett once said that as you get older, there are moments of confusion and ultimate moments, and he doesn't want to be forced to retire because of stupid decisions, he wants to be able to get advice in time.
* The clear announcement of the people, two people less than the previous three, is clearer and clearer, and it will also be easier to ensure a "stable" transition of the company because of his possible departure.
Fifth, miss Munger.
In his latest letter to shareholders, Warren Buffett mentioned that Charlie Munger, who died in November last year, should forever be known as Berkshire Hathaway's "architect", and he himself is like the company's general contractor, putting Munger's vision into practice every day. In a sense, Munger is "like an older brother and sometimes like a loving father."
It wasn't until I was 35 years old, in 1959, that I had the pleasure of meeting him for the first time. In 1962, Charlie decided to step into the world of money management, and three years later, he told me bluntly: My decision to buy Berkshire was simply stupid. But he promised that now that I had taken this step, he would guide me on how to correct it. 
Warren Buffett as a young man).
Warren Buffett praised Munger as a "designer" and likened himself to an "executor". Munger was tolerant, loving, and guiding to himself, pointed out the mistakes he had annoyed, pulled himself back from the brink of danger in time, and left the honor to Buffett and so on. Munger has peerless intelligence, a broad mind, a relatively weak desire for money, and is full of interest and care for society. The company will publish the fourth edition of the Poor Charlie's Almanac in honor of Charlie Munger.
Reminder: This article is the price investment notes or insights of the river, mainly personal opinions, investors need to make investment decisions in line with their own thinking and judgment.
*Please contact the author or indicate the source. The data and information in this article are not only indicated** on the Internet, if there is anything wrong, please contact for correction.
If you feel that this article is useful to you, please use your rich hand to pay attention to the price investment notes of wxh river water, reward, like or **. Thank you!