Berkshire Hathaway Letters to Shareholders Quotes

“If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Culture, more than rule books, determines how an organization behaves.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“But then it dawned on me that the opinion of someone who is always wrong has its own special utility to decision-makers.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“stocks of companies selling commodity-like products should come with a warning label: “Competition may prove hazardous to human wealth.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“students need only two well-taught courses—How to Value a Business, and How to Think About Market Prices. Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now. Over time, you will find only a few companies that meet these standards—so when you see one that qualifies, you should buy a meaningful amount of stock. You must also resist the temptation to stray from your guidelines: If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value. Though it’s seldom recognized, this is the exact approach”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“our experience with newly-minted MBAs has not been that great. Their academic records always look terrific and the candidates always know just what to say; but too often they are short on personal commitment to the company and general business savvy. It’s difficult to teach a new dog old tricks.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Our favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders

“Talking to Time Magazine a few years back, Peter Drucker got to the heart of things: “I will tell you a secret: Dealmaking beats working. Dealmaking is exciting and fun, and working is grubby. Running anything is primarily an enormous amount of grubby detail work . . . dealmaking is romantic, sexy. That’s why you have deals that make no sense.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“If your employees, including your CEO, wish to give to their alma maters or other institutions to which they feel a personal attachment, we believe they should use their own money, not yours.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Many shall be restored that now are fallen and many shall fall that are now in honor.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“There is no tougher job in corporate America than running an airline: Despite the huge amounts of equity capital that have been injected into it, the industry, in aggregate, has posted a net loss since its birth after Kitty Hawk. Airline managers need brains, guts, and experience—and”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Charlie’s dictum: “All I want to know is where I’m going to die so I’ll never go there.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“(Don’t ask the barber whether you need a haircut.)”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Alas, my “fiddle playing” will not get me to Carnegie Hall — or even to a high school recital. Berkshire, on your behalf and mine, will send the Treasury $3.3 billion for tax on its 2003 income, a sum equaling 2½% of the total income tax paid by all U.S. corporations in fiscal 2003.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Despite our policy of candor, we will discuss our activities in marketable securities only to the extent legally required. Good investment ideas are rare, valuable and subject to competitive appropriation just as good product or business acquisition ideas are.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Pascal’s observation seems apt: “It has struck me that all men’s misfortunes spring from the single cause that they are unable to stay quietly in one room.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“The bet illuminated another important investment lesson: Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta. What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“A CEO’s behavior has a huge impact on managers down the line: If it’s clear to them that shareholders’ interests are paramount to him, they will, with few exceptions, also embrace that way of thinking.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“financial markets will become divorced from reality — you can count on that. More Jimmy Lings will appear. They will look and sound authoritative. The press will hang on their every word. Bankers will fight for their business. What they are saying will recently have “worked.” Their early followers will be feeling very clever. Our suggestion: Whatever their line, never forget that 2+2 will always equal 4. And when someone tells you how old-fashioned that math is ---zip up your wallet, take a vacation and come back in a few years to buy stocks at cheap prices.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at headquarters nor financing worries nor Wall Street harassment. They simply get a letter from me every two years (reproduced at the end of this letter) and call me when they wish. And their wishes do differ: There are managers to whom I have not talked in the last year, while there is one with whom I talk almost daily. Our trust is in people rather than process. A “hire well, manage little” code suits both them and me.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“The accountants' job is to record, not to evaluate. The evaluation job falls to investors and managers.
Accounting numbers, of course, are the language of business and are of enormous help to anyone evaluating the worth of a business and tracking its progress. Charlie and I would be lost without these numbers: they invariably are the starting point for us in evaluating our own businesses and those of others. Managers and owners need to remember, however, that accounting is but an aid to business thinking, never a substitute for it. p198”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders

“We select our marketable equity securities in much the same way we would evaluate a business for acquisition in its entirety. We want the business to be (1) one we can understand, (2) with favorable long-term prospects, (3) operated by honest and competent people, and (4) available at a very attractive price. We ordinarily make no attempt to buy equities for anticipated favorable stock price behavior in the short term. In fact, if their business experience continues to satisfy us, we welcome lower market prices of stocks we own as an opportunity to acquire even more of a good thing at a better price. 1977”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders

“From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“A line from Bobby Bare’s country song explains what too often happens with acquisitions: “I’ve never gone to bed with an ugly woman, but I’ve sure woke up with a few.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“In insurance, as elsewhere, the reaction of weak managements to weak operations is often weak accounting. (“It’s difficult for an empty sack to stand upright.”)”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Witness the tenacity with which almost all clung to the theory of efficient markets throughout the 1970s and 1980s, dismissively calling powerful facts that refuted it “anomalies.” (I always love explanations of that kind: The Flat Earth Society probably views a ship’s circling of the globe as an annoying, but inconsequential, anomaly.)”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“All things considered, the third best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“When Walter and Edwin were asked in 1989 by Outstanding Investors Digest, “How would you summarize your approach?” Edwin replied, “We try to buy stocks cheap.” So much for Modern Portfolio Theory, technical analysis, macroeconomic thoughts and complex algorithms.”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024

“Our capital is underutilized now, but that will happen periodically. It’s a painful condition to be in — but not as painful as doing something stupid. (I speak from experience.)”
― Warren Buffett, Berkshire Hathaway Letters to Shareholders: 1965-2024