Glenn asked me to summarize the Warren Buffett annual Letter to Shareholders, so here’s the good stuff for people not particularly interested in Berkshire itself.
Berkshire bought Fruit of the Loom a few years ago:
“In apparel, Fruit of the Loom increased unit sales by 10 million dozen, or 14%, with shipments of intimate apparel for women and girls growing by 31%. Charlie [Warren’s 80 or so year old partner], who is far more knowledgeable than I am on this subject, assures me that women are not wearing more underwear. With this expert input, I can only conclude that our market share in the women’s category must be growing rapidly.”
On the opening of a new R.C. Willey store, after Warren had discouraged the opening of previous stores in Las Vegas because he felt the closed-on-Sunday rule of W.C. Willey wouldn’t fly outside of Utah. He was very, very wrong about this discouragement, the Las Vegas stores have dwarfed the Utah stores in sales.
“R.C. Willey will soon open in Reno. Before making this commitment, Bill and Scott again asked for my advice. Initially, I was pretty puffed up about the fact that they were consulting me. But then it dawned on me that the opinion of someone who is always wrong has its own special utility to decision-makers.”
On NetJets, Berkshire’s fractional-ownership of jets company.
“I viewed the selection of a flight provider as akin to picking a brain surgeon: you simply want the best. (Let someone else experiment with the low bidder.)”
He also referenced two articles he had penned this past year. The Fortune article is a very readable must-read for anyone interested in the particular hand baskets the U.S. is riding to hell in (trade deficits and budget deficits). The other one is an interesting summary of why it is a good thing that the SEC is making corporations expense stock options.
Selling The Nation from Fortune.
Fuzzy Math and Stock Options from The Washington Post
The rest of the letter is interesting reading (at least, to me), but not easily summarized. He discusses for many paragraphs the two topics of the above articles very eloquently and simply.
One interesting item is that his wife died this year, and there is nary a mention of it in the letter, though he has mentioned the passing and retirements of other Berkshire people. I guess, in the end, it’s a private thing.
I’m now pondering whether I could swing going to the annual meeting this year. What do you suppose tickets to Omaha, NE cost?
In other news, Coca-Cola Lime is just… eh.
