Letter

Berkshire Hathaway's 2005 letter to shareholders

Warren Buffett · 2006

Its parable of the Gotrocks family is among the clearest explanations of why fees and trading reduce what investors as a group can earn from the businesses they own.

• Investing
• Incentives

1 idea from this letter

• FrameworkInvesting located

  The Gotrocks family: how helpers take a fifth of what the owners earn

  Investors as a group earn what businesses earn minus what they pay to helpers; every layer of advice is a claim on that pool.

  Asset management economics, the active-passive debate, and any fee discussion.