Planes, trains, and ketchup

Full disclosure: I am an investor in Berkshire Hathaway.

Yesterday, Berkshire Hathaway released it’s 2015 Annual Report to the public. The entire report is 120 pages long but the real gem is in the beginning, which is Warren Buffett’s letter to shareholders. As it has been for the last 50 years, every annual report includes this letter from Buffett, which is always a witty and insightful read. This year’s letter was no different.

All public companies are required by law to release an annual report each year. And many of them also include a letter to their shareholders. What separates Buffett’s letter is his ability to write and think clearly about topics that often get complicated by the popular media. For instance, one of the topics Buffett talks a lot about, for obvious reasons, is the stock market.

If you were to turn on CNBC right now and listen to it for 10 minutes, I would take a bet that unless you’re an investment banker, most of it is hogwash. But Buffett is able to take a complicated system and break it down into an analogy that elementary school students can understand: in the short-term, the stock market is a voting machine and in the long-term, it’s a weighing machine.┬áBy using this simple analogy he is able to explain to the common person why you should pay little attention to the market day to day but instead be interested in what it has to say over the course of a few years.

Another quality of the Berkshire letter that goes unmatched is Buffett’s honesty. He doesn’t make excuses like most managers and investors do when they miss their numbers or try and cover up loses with complicated jargon or fancy accounting. Instead, he’s upfront about his mistakes and even explains the quirks of accounting despite it not being in his own interest. He even sometimes manages to do so by putting a smile on your face with his wit.

Another impressive part of the letter is it doesn’t avoid the messier subjects like employee job-loss. In this year’s letter Buffett addresses the growing uncertainty many Americans today have with future work prospectus in the section Productivity and Prosperity. He does so by explaining the business side of the equation but also recognizes the struggle of the worker side. In an industry that sometimes treats people like numbers on a sheet, it’s often refreshing to hear one of the country’s largest employers recognize the struggle of the individual worker.

There are many other lessons and tidbits to get out of any Berkshire Hathaway annual letter, but I’ll leave the rest to you. Even if you have no interest in business, the letter to shareholders is an insightful and fun read.

I hope one day I have a company that is as well and honestly run as Berkshire Hathaway is by Buffett and Munger.


If you ended up reading this year’s Berkshire letter and want more, visit the Berkshire Hathaway website or pick up this book of shareholder letters.

Also unfortunately, this year I am unable to attend the annual shareholder’s meeting in Omaha. So if you are interested in going to the meeting reach out to me for tickets. As someone who’s gone to it before, it’s definitely worth checking out!