Investment Theory #19: Berkshire Hathaway’s 1980 Letter

This post continues our series on Berkshire Hathaway’s annual letters. Original letters can be found here.

Links to past years: 1977, 1978, 1979

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

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Investment Theory #18: Berkshire Hathaway’s 1979 Letter

This post continues our series on Berkshire Hathaway’s performance from 1977 to today. Shareholder letters can be found here.

Links to previous posts: 1977, 1978

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

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Investment Theory #17: Berkshire Hathaway’s 1978 Letter

In 1962, Warren Buffett began purchasing shares of Berkshire Hathaway – a downsizing textile manufacturing company. In 1965, after feeling slighted by management, Buffett acquired control of Berkshire. Shortly after, Berkshire purchased an insurance company and began using its float to fund investments and acquisitions. Using this as a launching pad, Berkshire’s share price rose from $8 in 1962 to $276,800 in 2017 (20% annualized).

This post continues our series on that performance. Our goal is to gain some insight into one of the most successful investment vehicles in history. Warren Buffett’s shareholder letters can be found here.

Links to Berkshire’s past years: 1977

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

Continue reading “Investment Theory #17: Berkshire Hathaway’s 1978 Letter”

Investment Theory #16: Berkshire Hathaway’s 1977 Letter

In 1962, Warren Buffett began purchasing shares of Berkshire Hathaway – a textile manufacturing company in the process of downsizing. In 1965, after feeling slighted by management, Buffett acquired control of Berkshire. In 1967, Berkshire purchased an insurance company and began using its float to fund investments. Through acquisitions and investments, Berkshire’s share prices would appreciate 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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Investment Theory #13: Buffett’s 1968 Letter

In 1956, Warren Buffett concluded his work for Benjamin Graham and returned to Omaha, where he started an investment partnership. This partnership was formed with seven limited partners, made up of family and friends, contributing $105,000, and Warren Buffet contributing $100. It grew over time.

This post continues my series about that partnership. The goal is to gain some insight into one of the most successful investment vehicles in modern history.

Links to past years can be found here: 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964, 1965, 1966, 1967

Continue reading “Investment Theory #13: Buffett’s 1968 Letter”

Investment Theory #12: Buffett’s 1967 Letter

In 1956, Warren Buffett concluded his work for Benjamin Graham and returned to Omaha, where he started an investment partnership. This partnership was formed with seven limited partners, made up of family and friends, contributing $105,000, and Warren Buffet contributing $100. It grew over time.

This post continues my series about that partnership. The goal is to gain some insight into one of the most successful investment vehicles in modern history.

Links to past years can be found here: 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964, 1965, 1966

Continue reading “Investment Theory #12: Buffett’s 1967 Letter”

Investment Theory #11: Buffett’s 1966 Letter

In 1956, Warren Buffett concluded his work for Benjamin Graham and returned to Omaha, where he started an investment partnership. This partnership was formed with seven limited partners, made up of family and friends, contributing $105,000, and Warren Buffet contributing $100. It grew over time.

This post continues my series about that partnership. The goal is to gain some insight into one of the most successful investment vehicles in modern history.

Links to past years can be found here: 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964, 1965

Continue reading “Investment Theory #11: Buffett’s 1966 Letter”

Human Nature #11: Social Proof

In the 1950s, Solomon Asch developed an experiment to study how individuals yielded to or defied a majority group. A group of 8 students would be shown a card with a reference line on it. The line was a certain length, let’s say 1 inch. The group was then shown three different lines and asked which line best matched the reference. Two of the lines were clearly longer or shorter and one matched perfectly.

The trick was that 7 of the 8 students were confederates, people who were in on the experiment. In the first round, the confederates were all instructed to give the right answer. The test subjects also gave the right answer. But in the third round, the confederates were instructed to give the same wrong answer. The test subjects also gave the same wrong answer.

What happened here? Why did the test subject give a clearly wrong answer just because other people were doing it? This is the subject of today post.

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Investment Theory #10: Buffett’s 1965 Letter

In 1956, Warren Buffett concluded his work for Benjamin Graham and returned to Omaha, where he started an investment partnership. This partnership was formed with seven limited partners, made up of family and friends, contributing $105,000, and Warren Buffet contributing $100. It grew over time.

This post continues my series about that partnership. The goal is to gain some insight into one of the most successful investment vehicles in modern history.

Links to past years can be found here: 1957, 1958, 1959, 1960, 1961, 1962, 1963, 1964

Continue reading “Investment Theory #10: Buffett’s 1965 Letter”

Investment Theory #9: Buffett’s 1964 Letter

In 1956, Warren Buffett concluded his work for Benjamin Graham and returned to Omaha, where he started an investment partnership. This partnership was formed with seven limited partners, made up of family and friends, contributing $105,000, and Warren Buffet contributing $100. Over time it grew.

This post continues my series about that partnership. The goal is to gain some insight into one of the most successful investment vehicles in modern history.

Links to past years can be found here: 1957, 1958, 1959, 1960, 1961, 1962, 1963

Continue reading “Investment Theory #9: Buffett’s 1964 Letter”