Over the years, Buffett goes on to explain that as a net buyer of stocks, the best thing that can happen is for stock prices to drop, as articulated in his 1977 letter when he states that “we ordinarily make no attempt to buy equities for anticipated favorable stock price behavior in the short term. When Mr. Market offers high prices, the investor can take advantage by selling to him at a price above intrinsic value, and when he offers low prices, the investor can take advantage by buying from him at prices below intrinsic value. In this chapter, Graham characterizes the market as a manic-depressive who comes each day to offer prices at which he will buy from and sell to the investor, whichever one the investor chooses. Occasionally, Buffett will choose to include special topics in his letters on whatever topic he feels that his shareholders should be aware. These forty-eight letters do not provide a magic formula for valuing companies or maximizing profit in the market. Through Warren Buffett’s annual letters to his shareholders, his readers follow Berkshire’s journey from struggling textile mill to diversified juggernaut with a great amount of detail.
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If a functional board is in place, and it is dealing with “mediocre or worse” management, it has a responsibility to the absentee shareholder to change that management. If board members lack either integrity or the ability to think independently, the directors can actually do a great deal of harm to shareholders. At this point, Buffett has seen many CEO’s taking various actions that hurt their shareholders, including reckless acquisition and employing questionable accounting practices. The 20% average return produced by Buffett over this period would have grown a $1,000 original investment to $97 million. Over these same 63 years, the average market return was just under 10%, including dividends. Under the right circumstances, there is very little that a manager can do to benefit his/her shareholders more than repurchasing undervalued shares.
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The knowledge that he lends in his letters, while perhaps not as monetarily beneficial as investing in a few shares of Berkshire back in 1965, is incredibly valuable to any person who wishes to learn the art of investing. The per share stock price has risen from $22.54 in 1977, to over $340,000 today. It’s a compilation of every letter Warren Buffett wrote to the shareholders of Berkshire Hathaway. Indeed, these letters can at times provide a window into the mind of a man who is widely considered to be the greatest investor of all time. Additionally, when able but greedy managers begin to “dip too deeply into shareholders’ pockets, directors must slap their hands.” Over this period, an average market return would have grown a $1,000 investment to $405,000 if all income had been reinvested.
Clearly, these letters serve a far greater purpose than simply the ability to follow the activities of Berkshire Hathaway on a yearly basis. Buffett states that the best place to find true independence-“the willingness to challenge a forceful CEO when something is wrong or foolish”-is among people whose interests are aligned with shareholders. In his mind, the best directors are those who have their interests best aligned with shareholders.
Buffett first mentions his philosophy on market fluctuations in his 1974 letter.
- The investor can always use Mr. Market to his advantage as long as he understands that Mr. Market’s purpose is to serve him rather than to guide him.
- In his 1993 letter, Buffett lays out the three “boardroom situations” in great detail.
- Following these results is usually a discussion of how the change in intrinsic value is the metric that counts, but that book value is a conservative substitute that approximately tracks intrinsic value.
- I’ve compiled every Berkshire Hathaway shareholder letter from 1977 to 2024 in one downloadable PDF.
While he does admit that the market is often efficient, Buffett believes that inefficiencies exist in the market that can be exploited through careful analysis. “Observing correctly that the market was frequently efficient, they went on to conclude that it was always efficient. In his 2012 letter, Buffett reaffirms these sentiments by saying, “Indeed, disciplined repurchases are the surest way to use funds intelligently. When these two criteria are met, Buffett is a strong proponent of corporate share repurchases.
On Market Fluctuations
The highest praise that he can bestow upon his managers is that they “unfailingly think like owners.” Buffett often states that he has two major standards by which he evaluates his management. The best way to ensure this is to invest in companies employing low levels of leverage and enough financial strength to weather inevitable storms down the road. This is a two-pronged approach for assessing the underlying economics of a company. Neither Graham nor Buffett place any sort of value on market forecasts, and while past performance is no indication of future success, it is still a far better indicator than any market forecast previously produced. Graham had his own list of various criteria that had to be met in order to ensure a company’s financial strength, and one of them was consistent strong earning power in the past.
You can view and download every letter below. The Buffett Bible includes every Warren Buffett partnership and Berkshire Hathaway Shareholder letter from 1957 to Present. Ask the publishers to restore access to 500,000+ books.
- Buffett himself has said that he was “wired at birth to allocate capital,” which is evident not only through his impressive track record, but also through the tremendous amount of wisdom exuded in each of his letters.
- In fact, for a number of years, at the end of each letter he would place an advertisement for possible acquisition candidates from his shareholders.
- Berkshire has averaged a book value growth rate of 19.7% compounded annually from $19 per share in 1965 to $114,214 per share in 2012.
- This is because an enlarged capital base from retaining earnings can produce “record” earnings yearly even if management does not employ capital any more effectively than it did in the past.
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- Conversely, if a manager cannot create over $1 of market value for every $1 retained, he has a duty to his shareholders to distribute his earnings to them so that they may earn a higher rate of return elsewhere.
“We test the wisdom of retained earnings by assessing whether retention, over time, delivers shareholders at least $1 of market value for each $1 retained.” (1983) In later letters, he sets forth an in-depth example of how much frictional trading costs can eat away at investing returns. In his 1983 letter, he states his distaste for highly active investing, saying, “One of the ironies of the stock market is the emphasis on activity. He shuns the idea that diversification limits risk because often it requires that investors move money away from winning stocks and into companies with which they are unfamiliar.
Warren Buffett is expected to release the 50th edition of his letter to Berkshire Hathaway shareholders this weekend. I’ve compiled every Berkshire Hathaway shareholder letter from 1977 to 2024 in one downloadable PDF. The Berkshire Hathaway returns, on a per share basis, over it’s lifetime are absolutely staggering. The entire book is paginated, and has easy-to-flip-to labels for each letter’s year. A combination of traits is required, including an understanding of true risk and market fluctuations. Buffett makes it clear that investing is far from a science and that there is much more to being a berkshire hathaway letters to shareholders successful investor than being the smartest person in the room.
Buffett favored return on equity over earnings per share as a yardstick to measure managerial effectiveness. Buffett is a proponent of purchasing extraordinary companies at fair prices, rather than average companies at bargain prices. In fact, for a number of years, at the end of each letter he would place an advertisement for possible acquisition candidates from his shareholders. Obviously the stock was riskier at the higher price by Buffett’s definition, but its beta was much higher only after its price dropped (and the risk was largely removed).
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Buffett strongly opposes the idea that stock prices always reflect all publicly available information. This emphasis on trading equal amounts of intrinsic business value ensures that neither party in any of Berkshire’s acquisitions will be taken advantage of, and is ultimately the most fair basis upon which to make a stock-for-stock transaction. Buffett also believes that rather than being worried about how dilutive a merger can be in terms of per share earnings, what really counts is whether a merger is dilutive or anti-dilutive in terms of intrinsic business value. Buffet touches on this fact in his 2009 letter, in which he says, “In more than fifty years of board memberships, however, never have I heard the investment bankers (or management!) discuss the true value of what is being given.” However, many managers follow a rigid dividend policy in which they can be forced to distribute earnings that could be reinvested at a high rate of return or retain earnings that should be distributed because they cannot be reinvested at a high enough rate of return.
Central to Buffett’s thesis on dividend policy is the concept that not all retained earnings are equal.
If a manager is able to employ all of company earnings internally at a high rate of return that will create over $1 of market value for every $1 retained, managers should do so. In fact, if their business experience continues to satisfy us, we welcome lower market prices for stocks we own as an opportunity to acquire even more of a good thing at a competitive price.” By viewing market prices as quotes from a manic-depressive business partner, the investor is now put in a position of power over market prices rather than enslaved by them (a far-too-common occurrence). Readers of these letters are provided with an invaluable understanding of how to view markets and companies, which is exceedingly beneficial for passive investors and professionals alike. Readers gain a framework for how to view risk, markets, and investing, as well as an understanding of how truly great businesses should operate.
In this case, if stocks are traded based on market price, shareholders of the company with the more overvalued stock will ultimately benefit at the expense of shareholders of the other company (similar to the benefits of trading with an overvalued currency). In his letters, Buffett often speaks of how investors should respond to fluctuations in market prices. Conversely, if a manager cannot create over $1 of market value for every $1 retained, he has a duty to his shareholders to distribute his earnings to them so that they may earn a higher rate of return elsewhere.
Additionally, managers conducting share repurchases demonstrate their shareholder-oriented mindset that Buffett values so highly. Buffett has two criteria that must be met for share repurchases to become advisable for a business. Making Berkshire stock more tradable would inevitably lead to more trading, and more trading would lead to fewer long-term investors. He views a stock-for-stock transaction to be a case in which both companies are making a partial sale of themselves. Buffett only contemplates issuing additional shares of stock as part of an acquisition (and even in this instance, only grudgingly). Retained earnings can be worth considerably more or less than 100 cents on the dollar, and managers should adopt dividend policies that reflect that fact.
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Buffett simply defines investing as “forgoing consumption now to have the ability to consume more later.” “In stating this opinion, we define risk, using dictionary terms, as ‘the possibility of loss or injury.’” (1993) Following these results is usually a discussion of how the change in intrinsic value is the metric that counts, but that book value is a conservative substitute that approximately tracks intrinsic value. Berkshire’s goal is to keep the companies operating exactly as they were before the purchase. Berkshire’s cost-free float, while carried on its books as a liability, has proven to be one of its greatest assets.
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As a long term investor, the durability of a competitive advantage is a key concern to Buffett. Buffett’s attitude on management, while simple, has produced outstanding results at many of Berkshire’s subsidiary companies. Early on, readers see that Buffett is very candid in his communication with his shareholders and that he does not shy away from discussing both his triumphs and failures.
Effectively, some retained earnings are worth more than 100 cents on the dollar, while some are worth considerably less. He goes on to state that, as opposed to Adam Smith’s “invisible hand,” hyperactive markets act like an “invisible foot,” tripping up and slowing down a progressing economy. But investors should understand that what is good for the croupier is not good for the customer.
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浙江省人民医院心血管内科简介
心血管内科作为医院重中之重学科，技术力量雄厚，科研设备先进，综合实力居省内领先水平，具有鲜明的临床特色。心内科是浙江省临床重点专科、浙江省中医药重点学科、浙江省心脑血管病临床医学研究中心核心单位和杭州医学院心血管病研究所，在医疗、教学、科研等方面均取得了显著成就。
本科室拥有一支高素质的医护团队，包括医生50名，技师3名，其中博士20名，硕士29名，正高职称13名，副高职称10名。护理人员70人，副主任护师3名。技术力量雄厚，拥有各方面人才。作为多家知名医学院校的博硕研究生培养基地，有博士生导师1名，硕士生导师3名。科室为冠脉、心律失常、结构性心脏病、CRT起搏的国家级介入诊疗培训基地，是国内首批且连续8年省内唯一的国家级先心病介入诊疗培训基地，为心血管介入领域培养了大量专业技术人才。
心内科专注于各类心血管疾病的诊治，包括高血压、冠心病、先天性心脏病、心律失常、心力衰竭等。以心血管病介入诊疗为特色，能够开展目前所有国内主流的心血管介入诊疗技术，技术全面，包括：冠脉介入诊疗技术（如冠脉造影、冠脉支架植入、血管内超声（IVUS）、冠脉血流储备测定（FFR）、冠脉药物球囊、冠脉内旋磨、冠脉内冲击波球囊、肥厚性心肌病化学消融、冠状动脉瘘封堵等）、心内电生理检查、射频消融（如室上速射频消融、室早/室速射频消融、房扑/房颤射频消融等）、冷冻消融（如室上速冷冻消融、房颤冷冻球囊消融等）、心脏起搏器植入（如单腔起搏器、双腔起搏器、三腔起搏器CRT/CRT-D、除颤起搏器ICD、植入术心电记录器等）、先天性心脏病介入封堵术（如房间隔缺损、室间隔缺损、动脉导管未闭、卵圆孔未闭等）、左心耳封堵预防房颤血栓等。
心律失常介入治疗是科室的主要特色之一，采用先进的三维标测技术，手术成功率高，并发症少。本科室是国内最早引进先进心内膜激动标测系统的医院之一，开创了国内三维电生理标测指导射频消融的先河。冠脉介入团队在急性心肌梗死的急诊介入治疗等方面处于省内领先地位。结构性心脏病团队在先天性心脏病介入治疗方面成绩斐然，是浙江省内唯一的首批国家级先心病介入治疗培训基地。起搏团队在心脏起搏器植入技术等方面达到省内领先水平。
近年来，心内科在国内外核心期刊发表学术论文100余篇，其中SCI论文近百篇。科室主编多部心电生理专著，近年来主持国家自然科学基金6项、省部级课题14项、厅局级课题50+项，研究经费400余万元。科室荣获国家教育部高等学校科学研究优秀成果奖（自然科学）二等奖、浙江省科学技术进步奖二等奖、浙江省高等学校科研成果奖三等奖、浙江省中医药科研成果三等奖各1项。在教学方面，心内科是多所高校的见习及实习基地，承担了大量的理论及实践带教工作。教学团队多次获得校级、院级优秀带教老师、优秀教学秘书、优秀教学科室等称号。
心内科始终将医疗质量与安全作为日常临床工作的重点，连续三年获得医院医疗质量安全奖第一名，成为医院的明星科室。科室将继续秉持”以病人为中心，医疗、教学、科研为一体”的理念，不断创新，努力提升医疗水平，为患者提供更优质的诊疗服务。