Although we read a lot at Burgundy, there is little that is considered “mandatory” reading. Warren Buffett’s annual letter to shareholders might top the list. Not long after the letter to the shareholders of Berkshire Hathaway is posted online, a keen Burgundian will quickly forward the link to all members of the firm. For disciplined value investors, Mr. Buffett’s words always present a clear and concise reminder for why we choose to invest the way we do.
In this year’s letter, Mr. Buffett frankly discusses both his successes and failures over the past year. He talks about succession planning, and his optimism about the eventual revival of the U.S. housing market. He presents an insightful opinion on the value of share repurchases as only a truly long-term investor can appreciate (and admits that many will not agree with him).
The highlight of the letter, in my opinion, can be found under the heading “The Basic Choices for Investors and the One We Strongly Prefer” (pages 17 through 19). In this section, Mr. Buffett discusses the dangers of currency-based investments, and his views on investing in speculative assets in contrast to productive ones. It is here that he announces to his thousands of followers that, “right now bonds should come with a warning label” and criticizes investments in gold for “being neither of much use nor procreative.” These pages are a must-read for thoughtful investors.
To read Berkshire’s annual shareholder letter, please follow this link.
This post is presented for illustrative and discussion purposes only. It is not intended to provide investment advice and does not consider unique objectives, constraints or financial needs. Under no circumstances does this post suggest that you should time the market in any way or make investment decisions based on the content. Select securities may be used as examples to illustrate Burgundy’s investment philosophy. Burgundy funds or portfolios may or may not hold such securities for the whole demonstrated period. Investors are advised that their investments are not guaranteed, their values change frequently and past performance may not be repeated. This post is not intended as an offer to invest in any investment strategy presented by Burgundy. The information contained in this post is the opinion of Burgundy Asset Management and/or its employees as of the date of the post and is subject to change without notice. Please refer to the Legal section of this website for additional information.
