Berkshire Hathaway Annual Letter -- Best Quotes

[overspool]

Feel free to add your own.


"...the treasury and fed have gone "all in."

"In fact, we were paid $2.8 billion to hold our foat during 2008. Charlie and I find this enjoyable."

"GEICO is now saving money for millions of Americans. Go to GEICO.com or call 1-800-847-7536" (Even Buffet enjoys shameless plugs)

"Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood
using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often,
though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing
formulas."

"We never want to count on the kindness of strangers in order to meet tomorrow’s obligations."

"When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."

"Derivatives are dangerous."

"Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with."

"During 2008 I did some dumb things in investments."

 

[texrex2002]

reading ther report now. good stuff.

 

[sonoma]

Derivatives contracts, in contrast, often go unsettled for years, or even decades, with counterparties
building up huge claims against each other. “Paper” assets and liabilities – often hard to quantify – become important parts of financial statements though these items will not be validated for many years. Additionally, a frightening web of mutual dependence develops among huge financial institutions. Receivables and payables by
the billions become concentrated in the hands of a few large dealers who are apt to be highly-leveraged in other ways as well. Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.

Sleeping around, to continue our metaphor, can actually be useful for large derivatives dealers because it assures them government aid if trouble hits. In other words, only companies having problems that can infect the entire neighborhood – I won’t mention names – are certain to become a concern of the state (an outcome, I’m sad to say, that is proper). From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply
won’t do; it’s mindboggling screw-ups that are required.

 

[Daal]

Quote from overspool:


"Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood
using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often,
though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing
formulas."

Lol, look whos talking. One of the biggest VAR type investors out there

 

[Daal]

I'm amazed is how he completly avoided to talk about one of his biggest mistakes ever. The guy is still long BANKING STOCKS when the KBW index is plunging into all-time lows, he is on the red on WFC and USB after holding it for years(He bought WFC in the early 90's). He will be LONG gone by the time banks hit new highs. Heck *I* wont be alive by the time that happens

 

[overspool]

Thought I would see something about that as well.

 

[mrstocker]

Quote from sonoma:

Derivatives contracts, in contrast, often go unsettled for years, or even decades, with counterparties
building up huge claims against each other. “Paper” assets and liabilities – often hard to quantify – become important parts of financial statements though these items will not be validated for many years. Additionally, a frightening web of mutual dependence develops among huge financial institutions. Receivables and payables by
the billions become concentrated in the hands of a few large dealers who are apt to be highly-leveraged in other ways as well. Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.

Sleeping around, to continue our metaphor, can actually be useful for large derivatives dealers because it assures them government aid if trouble hits. In other words, only companies having problems that can infect the entire neighborhood – I won’t mention names – are certain to become a concern of the state (an outcome, I’m sad to say, that is proper). From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply
won’t do; it’s mindboggling screw-ups that are required.

Spot on. IMO this is the main reason why WFC joined in by acquiring Wachovia. Is above a quote or your opinion?

 

[HGTrader]

"the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,”

 

[stock777]

"During 2008 I did some dumb things in investments."

I think that covers holding banking stocks very well.

PS Do you clowns really need to hear the obvious from Mr. B?

He would be the first to tell you that if you're waiting for his annual report to get insight, you've long missed the boat.

 

[sonoma]

Quote from mrstocker:

Spot on. IMO this is the main reason why WFC joined in by acquiring Wachovia. Is above a quote or your opinion?

Warren and Charlie beat me to it.