Investment Theory #16: Berkshire Hathaway’s 1977 Letter

In 1962, Warren Buffett began purchasing shares of Berkshire Hathaway – a textile manufacturing company that was liquidating mills. In 1965, after feeling slighted by management, Buffett acquired control. In 1967, Berkshire diversified purchased an insurance company and began using its float to fund investments. In 1970, Buffett became the Chairman and CEO of Berkshire. Through acquisitions and investments, Berkshire would see it’s share price rise from $8 in 1962 to $276,800 in 2017 (20% annualized).

This post begins my series on Berkshire Hathaway. The goal is to gain some insight into one of the most successful companies in modern history. We will be looking at Warren Buffett’s shareholder letters which can be found here.

Links to Buffett’s partnership years: 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964, 1965, 1966, 1967, 1968

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Analysis: Q3-2017 Macro Update

The resiliency of the economic expansion continued throughout the third quarter. GDP growth remained steady, unemployment remained low, the US dollar weakened, and the Fed remained on track for its second interest rate hike of the year. On the other hand, geopolitical concerns increased, the chance of tax reform decreased, and market valuations rose to a level that leaves little room for error.

As always, I have no idea what the near-term future will bring. This post is merely an attempt to see if we are closer to the top or the bottom of the economic cycle.

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