Berkshire Hathaway Letters to Shareholders: 1965-2024

by Warren Buffett

Charlie Munger, Berkshire’s Vice Chairman and my partner, and I make few predictions. One we will confidently offer, however, is that the future performance of Berkshire won’t come close to matching the performance of the past. The problem is not that what has worked in the past will cease to work in the future. To the contrary, we believe that our formula—the purchase at sensible prices of businesses that have good underlying economics and are run by honest and able people—is certain to produce reasonable success. We expect, therefore, to keep on doing well. A fat wallet, however, is the enemy of superior investment results. And Berkshire now has a net worth of $11.9 billion compared to about $22 million when Charlie and I began to manage the company. Though there are as many good businesses as ever, it is useless for us to make purchases that are inconsequential in relation to Berkshire’s capital. (As Charlie regularly reminds me, “If something is not worth doing at all, it’s not worth doing well.”) We now consider a security for purchase only if we believe we can deploy at least $100 million in it. Given that minimum, Berkshire’s investment universe has shrunk dramatically. Nevertheless, we will stick with the approach that got us here and try not to relax our standards. Ted Williams, in The Story of My Life, explains why: “My argument is, to be a good hitter, you’ve got to get a good ball to hit. It’s the first rule in the book. If I have to bite at stuff that is out o...