TIP521: WARREN BUFFETT’S

SHAREHOLDER LETTERS

06 February 2023

On today’s episode, Clay reviews Warren Buffett’s shareholder letters and shares his takeaways and distills some of the biggest lessons he learned.

If you asked a lot of value investors, they would tell you that reading Buffett’s letters is equivalent to an MBA on value investing and business. Buffett has a lot to teach us as investors as he has grown the value of Berkshire shares by over 3,600,000% since he took control of the business in 1965.

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IN THIS EPISODE, YOU’LL LEARN:

  • What Berkshire’s “Big Four” businesses are.
  • What Buffett looks for when investing in a business and what he looks for in a management team.
  • Why Buffett loves share repurchases and why they give me further vindication that a stock is cheap.
  • Why it pays to treat your colleagues and shareholders like partners.
  • Why industries with constant change should be avoided by investors.
  • How Buffett views cash and leverage in his capital allocation strategy.
  • What Buffett looks for when selecting him and Charlie’s successors.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:03] Clay Finck: Hey everyone. Welcome to The Investor’s Podcast. I’m your host, Clay Finck. On today’s episode, I’m going to be talking about my biggest takeaways from reading Warren Buffett’s shareholder letters. If you ask a lot of value investors, they would probably tell you that reading Buffett’s letters is equivalent to getting an MBA on investing and business.

[00:00:23] Buffett graciously shared the investing in business practices he has used for decades to grow. The market value for Berkshire Hathaway shares by 20.1% annually from 1965 through 2021, which over that entire time period was a 3.6 million percent return relative to 30000% for the S&P 500. Not only is there so much to learn from Buffett with regards to investing, but there are many life lessons as well.

[00:00:51] This reminds me of my previous episode I released talking about Guy Spier’s book, The Education of a Value Investor. Before we dive into the episode, I thought it would be a good opportunity to mention that TIP will be at the Berkshire Hathaway Annual Shareholder Meeting this year on May 6th, 2023.

[00:01:10] We’re hosting four free social events where you can meet Stig, Trey, and myself, as well as socialize with the rest of the TIP audience members. I’m also doing a get together prior to the meeting in front of the CenturyLink Center for the TIP members to meet and sit together at the annual meeting.

[00:01:26] Our social events are already getting a ton of attention as many people have already registered and 150 people have joined our WhatsApp Group Chat for details on our events, how to register, how to join the chat. Be sure to check out the itinerary and the show notes if you’re interested. For more details, you can also check out Episode 500 where Stig, and I discuss our events, the Berkshire meeting, and common questions asked by the audience members about the Berkshire weekend.

[00:01:52] I am beyond excited for Berkshire weekend, as I always have a fun time there connecting with other like-minded investors. It’s always one of the highlights of my year, and it will be even better getting to hang out with other TIP hosts as well as the audience members. Can’t wait to see all there.

[00:02:09] Without further delay, let’s dive right into today’s episode covering Warren Buffett’s shareholder letters.

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