“Nothing Beats Having a Great Partner” – Buffet in 2023 share holder letter

 12^th March 2023

“Nothing Beats Having a Great Partner” – Buffet in 2023 share holder letter

Dear Fellow Investors,

Namaste! Today I am taking you to the MASTER of the INVESTMENT – BUFFET. As usual he has written his shareholder letter this year also. However, this year letter is very small and does not talk much about the businesses as usual. But this year he has given full credit to his longtime partner Mr. Charlie Munger. Here what he has said in the letter about Mr. Munger.

Nothing Beats Having a Great Partner
 

Charlie and I think pretty much alike. But what it takes me a page to explain, he sums up in a sentence. His version, moreover, is always more clearly reasoned and also more artfully – some might add bluntly – stated.

Here are a few of his thoughts, many lifted from a very recent podcast:

• The world is full of foolish gamblers, and they will not do as well as the patient investor.

He talks about the advantage of investing for long term.

• If you don’t see the world the way it is, it’s like judging something through a distorted lens.

He says don’t be BIAS while studying the market and investment idea.

• All I want to know is where I’m going to die, so I’ll never go there. And a related thought:- Early on, write your desired obituary – and then behave accordingly.

Begin with an end in your mind.

• If you don’t care whether you are rational or not, you won’t work on it. Then you will stay irrational and get lousy results.

Find out your core reasons of failures or mediocre behaviors and work on them.

• Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.

Learn to be patience.

• You can learn a lot from dead people. Read of the deceased you admire and detest.

He always recommend reading biographies.

• Don’t bail away in a sinking boat if you can swim to one that is seaworthy.

Don’t go for mediocre investments like MF and SIP, if you have the facility to invest in direct equity.

• A great company keeps working after you are not; a mediocre company won’t do that.

Find out great companies and stick to them for ages.  He shares and example of COKE in this letter.

In August 1994 – yes, 1994 – Berkshire completed its seven-year purchase of the 400 million shares of Coca-Cola we now own. The total cost was $1.3 billion – then a very meaningful sum at Berkshire.

The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million.

Growth occurred every year, just as certain as birthdays. All Charlie and I were required to do was cash Coke’s quarterly dividend checks. We expect that those checks are highly likely to grow

• Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.

Once again – he is talking about finding and holding a great company for a long term.

• Ben Graham said, “Day to day, the stock market is a voting machine; in the long term it’s a weighing machine.” If you keep making something more valuable, then some wise person is going to notice it and start buying.

We are witnessing the prices are fluctuating due to FED interest rates, Adani issues and now USA bank failures. But the businesses are running as usual. Focus on that.  

• There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don’t count
on getting rich twice.

Avoid buying on MARGINS.

• You don’t, however, need to own a lot of things in order to get rich.

You don’t need 50-500 companies in your portfolio to become rich.

• You have to keep learning if you want to become a great investor. When the world changes, you must change.

Change in the only constant thing.

• Warren and I hated railroad stocks for decades, but the world changed and finally the country had four huge railroads of vital importance to the American economy. We were
slow to recognize the change, but better late than never.
Look at their vision in 2009. With ENERGY crises around the world – look at their rail business.

• Finally, I will add two short sentences by Charlie that have been his decision-clinchers for decades:

 “Warren, think more about it. You’re smart and I’m right.”

Before you commit to any idea – do think twice.

And so it goes. I never have a phone call with Charlie without learning something. And, while he makes me think, he also makes me laugh.

What NEXT?

Though the letter is missing the usual Buffet touch but the above learning are the best. Each sentence is equal to one MBA Degree. Think on them and if you agree – apply in your investment journey.

At Destiny Management – we provide holistic partnership to our clients so that they can have a friend in any kind of situations and not just in investments. If you like to grow holistically – you are most welcome to be with us.

Wish you all the best.

Follow me on Twitter @hiteshmparikh /  WhatsApp - +91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

 

Hitesh Parikh.