Warren Buffett’s 2012 Annual Shareholder Letter

I haven’t even read this yet, but I know it’s a must read.  I always recommend to all novice investors that they start by reading Warren Buffett’s annual shareholder letters.  Go here and read his partnership letters as well.  There are more little nuggets of knowledge in there than in just about any other book or writing on Wall Street.

Here’s the link to this year’s letter.  Feel free to point out anything you might like to discuss or anything you think might be worthy of a post.

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. “(Give us a try at 1-800-847-7536 or GEICO.com. Be sure to mention that you are a
    shareholder; that fact will usually result in a discount.)”

    I like discounts, Thanks Warren..

  2. Loved his comments about corporate bond portfolios held by most insurance companies as equivalent to wasting assets as the yield on new purchases can’t replace the book yield/coupon on the bonds that are maturing. These insurance firms are all highly leveraged business models with fairly high cost structures. The fate seems sealed and a 2% yield on the Barclays Agg just doesn’t pay the bills.

    I didn’t much care for his dividend analogy as it relates to publicly traded stocks. Regardless of the logic which was sound, the simple truth is as a practical matter, those firms that pay dividends and raise them over time outperform the market across a cycle.

    No real comments on market valuation as a whole. Disappointing as his favorite metric would suggest stocks generically are pretty pricey. Of course that model would have also said stocks were almost never overvalued prior to about 1995.

    All in all a good read but these letters are not as impactful as they were 10-15 years ago. Seems to be getting more politically correct as his legend grows and becomes concerned with his legacy.

  3. Have you ever run Berkshire Hiawatha through the Orcam Portfolio Review Process?

  4. Buffett has ulterior motives. He likes higher taxes so that the wealthy will buy his tax sheltering insurance policies.