While reading a few days ago Warren Buffett’s Letter to the Shareholders of Berkshire Hathaway, I was reminded of NetJets, the fractionary ownership of planes business which has as parent company. The fact that BRK owns such a company is quite ironic bearing in mind the following quote from Buffett:
“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”
But then again, Richard Branson, another prominent businessman, founded Virgin Atlantic, which is now part of the Virgin Group, chaired by Branson, who is quoted saying:
“The quickest way to become a millionaire in the airline business is to start out as a billionaire.”
Are these cases of “do as I say, not as I do”?
Last Saturday Warren Buffet’s letter to the shareholders of Berkshire Hathaway was released.
I encourage you to read it. In the best case it will raise some interest for this guy within you, and that may be translated in further readings and wiser investments decisions. If it doesn’t go that far, it’ll provide some fun reading. Let me give you some hints of this year’s letter:
“An old Wall Street joke gets close to our experience:
- Customer: Thanks for putting me in XYZ stock at 5. I hear it’s up to 18.
- Broker: Yes, and that’s just the beginning. In fact, the company is doing so well now, that it’s an even better buy at 18 than it was when you made your purchase.
- Customer: Damn, I knew I should have waited.”
“If Charlie, I and Ajit are ever in a sinking boat – and you can only save one of us – swim to Ajit.”
“GEICO’s managers, it should be emphasized, were never enthusiastic about my idea. They warned me that instead of getting the cream of GEICO’s customers we would get the – – – – – well, let’s call it the non-cream. I subtly indicated that I was older and wiser.
I was just older.”
“It’s clear that I failed you in letting NetJets descend into this condition. But, luckily, I have been bailed out.”
“Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.”
“Charlie and I enjoy issuing Berkshire stock about as much as we relish prepping for a colonoscopy.”
“If you decide to leave during the day’s question periods, please do so while Charlie is talking. (Act fast; he can be terse.)”
“If pushed, we would gladly pay substantial sums to have our jobs (but don’t tell the Comp Committee).”
It’s only 19 pages…