March 2, 2013
Warren’s Most
Important MSG in His Annual Letter
Greetings from
Hitesh! Yesterday only we were talking about the most important quality of
Investor is Optimism. Today morning we have got the biggest proof of the Optimism
from non other than Master himself. I call him MASTER.
His MSG To His
CEOs :-
“There was a lot
of hand-wringing last year among CEOs who cried “uncertainty” when faced with
capital allocation decisions (despite many of their businesses having enjoyed
record levels of both earnings and cash). At Berkshire, we didn’t share their
fears, instead spending a record $9.8 billion on plant and equipment in 2012,
about 88% of it in the United States.
That’s 19% more
than we spent in 2011, our previous high. Charlie and I love investing large
sums in worthwhile projects, whatever the pundits are saying. We instead heed the words from Gary Allan’s new country song, “Every
Storm Runs Out of Rain.”
We will keep our
foot to the floor and will almost certainly set still another record for capital
expenditures in 2013. Opportunities abound in America.”
A thought for my
fellow CEOs: Of course, the immediate future is uncertain; America
has faced the unknown since 1776. It’s just that sometimes people focus on the
myriad of uncertainties that always exist while at other times they ignore them
(usually because the recent past has been uneventful).
American
business will do fine over time. And stocks will do well just as certainly,
since their fate is tied to business performance. Periodic setbacks will occur,
yes, but investors and managers are in a game that is heavily stacked in their
favor. (The Dow Jones Industrials advanced from 66 to 11,497 in the 20th
Century, a staggering 17,320% increase that materialized despite four costly
wars, a Great Depression and many recessions. And don’t forget that
shareholders received substantial dividends throughout the century as well.)
Since the basic
game is so favorable, Charlie and I believe it’s a terrible mistake to try to
dance in and out of it based upon the turn of tarot cards, the predictions of
“experts,” or the ebb and flow of business activity. The risks of being out of the game are huge compared to the risks of being
in it.
My Personal
Call:-
As per the
statistics given by The Economist, USA grew 2.2% in 2012. At 2% USA GDP growth,
if Master is so optimistic………India is growing at 5%.....FIIs are following him.
Why you are missing this opportunity? I would just repeat what master has said
above…… The risks of being out of the game are huge compared
to the risks of being in it.
Wish You A Happy
Weekend.
Hitesh Parikh.
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