Berkshire Hathaway's 2011 letter to shareholders
- Written by
- Warren E. Buffett
- Organisation
- Berkshire Hathaway
- Filed
- 25 Feb 2012
- Sector
- Insurance and diversified holding company
Read the original at sec.gov (opens in a new tab)
This is the view as filed on 25 Feb 2012, not a statement of what the author thinks today.
About this letter
Warren E. Buffett wrote this letter to Berkshire Hathaway's shareholders about 2011. It is dated 25 February 2012 and opens the company's 2011 annual report. Berkshire's per-share book value rose 4.6% in the year. Among the highlights Buffett reports are the board's work on succession planning, the arrival of Todd Combs and Ted Weschler as investment managers, and the acquisition of Lubrizol, a producer of additives and specialty chemicals; among the setbacks, a costly bond purchase and the slump in housing.
The letter covers the usual ground of a Berkshire report, from the large stakes in American Express, Coca-Cola, IBM and Wells Fargo to insurance float and the operating businesses. Two sections stand out for a reader learning to invest: an explanation of when share repurchases help continuing owners, and an essay titled The Basic Choices for Investors and the One We Strongly Prefer.
Why read it
It sets out, in plain arithmetic, when buybacks create value and why Buffett measures risk by loss of purchasing power rather than volatility, two ideas at the centre of capital allocation.
What to notice
- 1
Buffett defines risk as the reasoned probability of losing purchasing power over the holding period, not beta, and on that basis calls bonds and other currency-based investments, usually thought safe, among the most dangerous of assets.
Continue the investment thesis
See the 3 remaining takeaways on what this investor is arguing and why, and every analysis across the Letters & Theses library.
Checking what you can open…
“what is smart at one price is dumb at another”
Companies discussed
- Berkshire Hathaway Inc.
- IBM
Topics
- investing philosophy
- capital allocation
- risk
- mistakes
- long term ownership
- leadership
L3VLUP does not host this document. It belongs to Berkshire Hathaway and is a public SEC filing; the notes above are L3VLUP’s reading of it.
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