Warren Buffett, chairman and CEO of Berkshire Hathaway, plays bridge following an annual Berkshire Hathaway shareholders meeting.Nati Harnik/The Associated Press
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
Amid the data-hungry, technology-driven, ever-accelerating hum of the global investment industry, Warren Buffett’s final letter to shareholders as he hands over the reins of Berkshire Hathaway is a remarkably retro piece of slow-cooked, homespun wisdom.
Mr. Buffett’s letters often have the feel of fireside chats, devoid of the usual corporate speak about leveraging strategic opportunities, hitting home runs and rising tides lifting all boats – language that drags down the genre and gives away the fact that most notes to shareholders are ghostwritten for leaders by metrics-obsessed investor relations types.
This one, released last week, is vintage Buffett, but even more so: deeply personal, transparent, self-reflective and newsy – a warm hug at a time of turbulence in world financial markets that treats readers like close friends, not investors.
It is unrushed, witty, self-deprecating, a bit wandering in places, but completely unabashed in its quirkiness. Artificial intelligence could never have created such a gem.
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Mr. Buffett, 95, has earned the latitude to be sentimental. After all, he is one of the world’s wealthiest people, with an estimated net worth of about US$160-billion, according to Forbes.
And he did it by unapologetically dancing to his own drumbeat. In a culture of excess and narcissism, he made plainness and nerdiness cool.
He has lived in the same modest house his entire adult life. And he aggressively resisted any temptation to move to the traditional power centres of the country, choosing instead to stay in the unlikely hub of Omaha, Neb., about as far from Wall Street and Silicon Valley as you can get.
His strategy was, not surprisingly, plain and simple, too: invest for the long term in companies you know.
If you like the way your John Deere lawnmower has lasted, the company might be a place you want to put your money. If you instinctively grab a hot cup of Campbell’s soup when you have the sniffles, maybe look to invest in the company. Need to cool off on a hot summer day? Reach for a Coca-Cola, then buy the stock.
Mr. Buffett’s final missive does not stray from that common-sense path. There’s a bit of reminiscing about his family and friends, some personal health updates and lots of assurances that his successor, Greg Abel, is a good guy.
He explains that he is selling shares to fund his kids’ foundations, not because he has any concerns about Berkshire Hathaway’s health under its new leader, and promises that he will hang onto lots of his A class shares through the transition.
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But the most valuable nuggets are his modest, plain-spoken bits of advice, which apply as much to life as they do to investing.
“I write this as one who has been thoughtless countless times and made many mistakes but also became very lucky in learning from some wonderful friends how to behave better (still a long way from perfect, however),“ he wrote. “Keep in mind that the cleaning lady is as much a human being as the Chairman.”
“My advice: Don’t beat yourself up over past mistakes – learn at least a little from them and move on. It is never too late to improve. Get the right heroes and copy them.”
He also reiterated his long-time saw of giving back: “Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any of thousands of ways, you help the world. Kindness is costless but also priceless. Whether you are religious or not, it’s hard to beat The Golden Rule as a guide to behavior.”
And in a somewhat melancholy thread, he makes light of his own aging as a nod to the need for boards to “be alert and speak up” if they see faltering mental acuity among senior executives running valuable assets.
“Father Time … now finds me more interesting as I age,” he wrote. “And he is undefeated; for him, everyone ends up on his score card as ‘wins.’ When balance, sight, hearing and memory are all on a persistently downward slope, you know Father Time is in the neighborhood.“
For anyone who works in any type of client service business – not just financial services – the letter is worth a read.
It is so personal and accessible, it engenders trust and confidence in a world of complexity beyond the grasp of average investors.
You can get the numbers anywhere, and AI can generate an accompanying analytic narrative. But this type of storytelling is a dying art – and we probably won’t see anything like it again.