I have spoken before about Warren Buffett and his legendary annual letters to the shareholders of Berkshire Hathaway. Buffett is now in his 81st year of being an investor, and has been, and continues to be one of the most successful investors of all time. He and his business partner Charlie Munger have been running Berkshire Hathaway for 58 years. Buffett is now aged 92 and Munger aged 99 but they are still totally focused and very much front and centre at these annual events.

As many of you will know the Snowball name of our business actually comes from Warren Buffett and his book ‘The Snowball: Warren Buffett and the Business of Life’.

Annual Letters to Shareholders

Investors await these annual letters with bated breath for their insights and words of wisdom, and Buffett is incredibly open in his views on their investments, their decision-making and what is going well and what is not going so well.

They are well worth a read and can be found on the Berkshire Hathaway website. The last time I referred to these annual events in 2019, I remarked that the website was very basic. This has now changed and there is a wealth of information on their including videos of many of the sessions that take place at the Annual Meeting itself.

I set out below some of the comments from his annual letter and from the annual meeting that took place just a few weeks ago:

Investment Ethos and Decisions

Opportunities present themselves when other people do dumb things! And over the years a lot of people have done a lot of dumb things!!

Disappointments are inevitable. They are understanding about business mistakes but tolerance for personal misconduct is zero.

They make investments in businesses with both long-lasting favourable economic characteristics and trustworthy managers.

Never make an emotional decision when investing!

Berkshire Results

Buffett believes that their ‘satisfactory’ results have been the product of about a dozen truly good decisions – that would be about one every five years – and a sometimes-forgotten advantage that favours long-term investors such as Berkshire. I think that rather underplays everything they do!!


Two of their biggest successes have been Coca-Cola and American Express (no doubt 2 of the 12 good decisions referred to earlier!)

Coca-Cola – In 1994 Berkshire spent $1.3 billion. The cash dividend received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million.

American Express – In 1995 Berkshire spent, coincidentally, $1.3 billion. Annual dividends received from this investment have grown from $41 million to $302 million.

EV Cars

The car market is just too tough. There are no permanent places for winners. There are huge capital costs and huge risks in this industry and as investors those two elements don’t sit well. Buffett said ‘I think I know where Apple is going to be in five or ten years, but I don’t know where the car companies are going to be’


AI offers huge opportunities and some of the tools are very exciting. However, there is also a lot of hype and actually ‘old fashioned intelligence’ works pretty well still.

US banking Collapses

It would have been catastrophic if the FDIC had not guaranteed all deposits after the collapse of SVB, even though above the $250k limit. However, Buffett does think that if the bank gets into trouble, both the CEO and the directors should suffice.

Creative Accounting

Buffett passed an important warning. Even the operating earnings figure they use can easily be manipulated by managers who wish to do so. Such tampering is often thought of as sophisticated by CEOs, directors and their advisors. Beating “expectations” is heralded as a managerial triumph. That activity is considered by Buffett as disgusting. It requires no talent to manipulate numbers. Only a deep desire to deceive is required. “Bold imaginative accounting,” as a CEO once described his deception to him, has become one of the shames of capitalism.

Elon Musk

Believe that Elon is very talented and doesn’t need to overestimate himself. He dreams about huge things, takes on the impossible and then does it!

Look forward to reading this next year!!