Welcome to Episode 4 of the "Becoming Buffett" Series!
This week we discuss the 1968 letter to Berkshire Hathaway shareholders.
Buffett's annual letters book: http://amzn.to/2ogVi4U
Some brief notes:
“Immediately after year end, we purchased all of the stock of Sun Newspapers, Inc. and Blacker Printing Company, Inc., which represents an initial entry into the publishing business.”
- Working hard to improve operating earnings in textile ares
- They aren’t just abandoning the investment at the first sign of trouble, willing to be patient to allow thesis to play out.
- Letter now divided into three sections: textile operation, insurance operations, and marketable securities/acquisitions
- Could you have one more income stream 3 years from now?
- Insurance operations going well
- Investment income increased substantially in 1968
- Capital gains from common stock investments
- “The insurance companies continue to seek new areas for expansion”
- Could you make ONE great investment this year that could reward you for years to come?
- Marketable securities/acquisitions
- Funds were held in common stocks as a temporary investment while waiting for acquisition or expansion opportunities
- Bought Sun Newspapers, Inc. and Blacker Printing Company, Inc. as entries into the publishing industry
- “This purchase, while small, has the potential for future expansion.”
- Is there a local, private company you could buy an interest in (or buy outright)?
- Let’s stretch our thinking in regard to the options available to us as investors
- Management of insurance and publishing companies continued under existing leadership after acquisition
- Quality mgmt is a big deal to Buffett
- Is it for you?
- Are YOU a quality manager of your business (household)?
- The benefits of great management is that you now have super talented people working to make you money; work to surround yourself with people smarter than you!