When Buffett Writes, You Should Read
TLDR on Warren's latest shareholder letter
Warren Buffett is an absolute legend.
Often referred to as the greatest investor of all time, Buffett has been a great resource and teacher over the years.
His annual shareholder letters have long been a masterclass in communication, and his 2024 letter was damn good.
Over the years, these letters have become shorter (thank god) but nevertheless always include little nuggets and stories that will distill complex ideas into simple, meaningful takeaways.
I admire his ability to communicate this way and frankly it’s a style we should all strive to emulate.
Here are some of my favorite parts of the recent letter…
The Importance of Accountability
I have great respect for Buffett for many reasons but at the top of that list is his ability to acknowledge mistakes and take accountability.
Sounds easy, right?
Yet you will notice with a majority of shareholder communications, earnings calls, etc. - it’s always butterflys and rainbows. These executives and companies can do no wrong, and if something goes wrong, it’s someone else’s fault.
When executives refuse to acknowledge errors, it can be a red flag.
During the 2019-23 period, I have used the words “mistake” or “error” 16 times in my letters to you. Many other huge companies have never used either word over that span. Amazon, I should acknowledge, made some brutally candid observations in its 2021 letter. Elsewhere, it has generally been happy talk and pictures.
Buffett understands that mistakes are inevitable in both investing and life. What matters is how you respond to them. We tend to focus so much on the things that don’t work out. But as time passes, you realize how little the mistakes impact your life. Water your flowers and pull the weeds.
Mistakes fade away; winners can forever blossom.
Success Doesn’t Require a Fancy Degree
Your success isn’t dictated by where you went to school.
Read that again for all of you who went to Boston College…
One further point in our CEO selections: I never look at where a candidate has gone to school. Never!
I was lucky enough to get an education at three fine universities. And I avidly believe in lifelong learning. I’ve observed, however, that a very large portion of business talent is innate with nature swamping nurture.
Education is valuable and often times necessary, but it’s not the sole determinant of success. I see this all the times with parents overly concerned on making sure their kids go to the best schools.
What truly matters is curiosity, work ethic, attitude and the ability to make sound decisions over time.
The Power of Storytelling
Buffett’s letters are always filled with stories, making them engaging and memorable. Whether in sales, leadership, or even coaching a team, the ability to tell a compelling story is a critical skill.
If you can tell a good story, you can make complex ideas accessible and inspire people to take action. It’s a skill worth developing in any career.
Be a man, pay your bills
One of my mentors said this one day and I f****** loved it.
Buffett is not afraid of his company’s tax bill and makes it clear that Berkshire Hathaway contributes significantly to the country’s tax revenue.
…Berkshire Hathaway – paid far more in corporate income tax than the U.S. government had ever received from any company – even the American tech titans that commanded market values in the trillions. To be precise, Berkshire last year made four payments to the IRS that totaled $26.8 billion. That’s about 5% of what all of corporate America paid. (In addition, we paid sizable amounts for income taxes to foreign governments and to 44 states.)
This is a rare level of transparency in the corporate world. Instead of seeking ways to minimize taxes to the extreme, or ducking them altogether, Buffett focuses on running a business that thrives despite these obligations.
Nick Maggiulli hit on this recently too which ties into last weeks blog:
Buffett’s 2024 shareholder letter is yet another example of why he remains one of the most respected voices in finance. His lessons on accountability, humility, and clear communication are applicable beyond investing.
If you haven’t read this year’s letter yet, take the time to do so. The wisdom Buffett shares is well worth the time spent reading.
Disclosure: This material is for general information only and is not intended to provide specific advice or recommendations for any individual.