Since 1965 BRK book value has grown from $19 per share to $211,750. That is an impressive rate of 19.1% compounded annually. The letter details the mindset that makes this sort of growth possible.
Do you think that your income tax return is a complicated aggravation? Could you complete it without professional help? You might feel better if you knew about the BRK income tax return. It comes to 32,700 pages!
Three issues of interest to followers and members of the Monday Morning Millionaire Program arise.
First is the intellectual prowess of Warren Buffett, the 87-year old company chairman and CEO and of 94-year-old Charlie Munger, the company old vice chairman. I started attending the company annual shareholder meetings in Omaha, Nebraska some 20 years ago. I thought they were old, then! They are truly an inspiration and role models of how to age well.
Fortunately, you no longer need to go to Omaha for these interesting meetings. They are now webcast by Yahoo! at https://finance.yahoo.com/brklivestream. This year’s meeting will go live at 8:45 AM Central Daylight Time on Saturday, May 5. Buffett and Munger will spend hours giving impromptu answers to investment questions from around the world.
Second, Buffett and Munger remain committed to investing in the American economy.
And third, they are solidly behind the concept of passive investing. In the letter, they state: “American investors pay staggering sums annually to advisors, often incurring several layers of consequential costs. In the aggregate, do these investors get their money’s worth? Indeed, again in the aggregate, do investors get anything for their outlays?”
The letter then mentions Buffett’s winning bet on an S&P 500 exchange traded fund (ETF) versus five hedge funds over the course of a decade. Putting savings into an S&P 500 ETF (any of S&P 500 ETF (symbol SPY), Vanguard S&P 500 (symbol VOO) and the iShares S&P 500 (symbol IVV) requires investors to sit in their rocking chairs. Hedge funds are actively managed requiring managers to work for hours and hours every day.
Highly effective investors, Monday Morning Millionaire Program members, will do as well as Berkshire Hathaway in the coming years.