Nuggets from The Oracle of Omaha

Warren Buffett sent his letter to shareholders over the weekend.  While there are so many factors that make him possibly the greatest investor, his ability to communicate with the masses has to be near the top of the list.  While not everyone wants to read the entire 28 page letter (although I would recommend it), below are some excerpts that stood out to me:

Charlie and I have no magic plan to add earnings except to dream big and to be prepared mentally and financially to act fast when opportunities present themselves. Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.

Here is one of the greatest investors explaining there is no secret sauce, but patience and taking advantage of opportunities during those dark times is what successful investors must be prepared for.

One word sums up our country’s achievements: miraculous. From a standing start 240 years ago – a span of time less than triple my days on earth – Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers. You need not be an economist to understand how well our system has worked. Just look around you. See the 75 million owner-occupied homes, the bountiful farmland, the 260 million vehicles, the hyper-productive factories, the great medical centers, the talent-filled universities, you name it – they all represent a net gain for Americans from the barren lands, primitive structures and meager output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion.

It is refreshing to view the positive progress from this long-term perspective, and inspiring to think about the future.

Be aware, though, that it’s the growth of the Berkshire forest that counts. It would be foolish to focus over-intently on any single tree.

He talks about specific companies within the letter, but this quote emphasizes the importance of diversification within an investment portfolio.

I’m a lucky guy, very fortunate in being surrounded by this excellent staff, a team of highly-talented operating managers and a boardroom of very wise and experienced directors. Come to Omaha – the cradle of capitalism – on May 6th and meet the Berkshire Bunch. All of us look forward to seeing you.

We can all learn from Warren Buffett and should be inspired by his words, gratitude, and most notably results.  If the cradle of capitalism lies in Omaha, Nebraska then you better believe anything is possible!

All comments and suggestions are welcome.

Tony Basalla