Dear Garden State Trust:
Have you read this year’s Berkshire Hathaway shareholder letter from Warren Buffett? What did you think?
—Fan of the Oracle of Omaha
I read the letter, as I do every year, and I loved it. Mr. Buffett has a remarkable talent for communicating complicated financial ideas in language that is easy to understand and fun to read. His investing philosophy can be summed up with his observation from this year’s letter: Never bet against America.
I was interested to learn that when Berkshire purchased shares of Apple in 2018 they eventually owned 5.2% of the company. Last year they sold a portion of that position and pocketed $11 billion in addition to dividends received on the stock. Yet because of a combination of share buybacks by Berkshire and Apple, the shareholders of Berkshire indirectly now own 10% more of Apple than they did before!
This year’s letter offers insights into the creation of Berkshire Hathaway, as well as charming anecdotes about the founders of some of the companies that Berkshire has purchased over the years. This one (slightly abridged) was my favorite:
“Over the years, we have purchased four additional businesses from Omaha families, the best known among them being Nebraska Furniture Mart (“NFM”). The company’s founder, Rose Blumkin (“Mrs. B”), arrived in Seattle in 1915 as a Russian emigrant, unable to read or speak English. She settled in Omaha several years later and by 1936 had saved $2,500 with which to start a furniture store. . . Once Mrs. B and Louie [who fought in World War II] were reunited, there was no stopping NFM. Driven by their dream, mother and son worked days, nights and weekends. The result was a retailing miracle. By 1983, the pair had created a business worth $60 million. That year, on my birthday, Berkshire purchased 80% of NFM, again without an audit. I counted on Blumkin family members to run the business; the third and fourth generation do so today. Mrs. B, it should be noted, worked daily until she was 103 – a ridiculously premature retirement age as judged by Charlie and me.”
Mr. Buffett is 90, and I sincerely hope that he is able to continue working to age 103.
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