In February, the businessman addressed the shareholders through a letter. Who better than him to show you how to achieve a successful career?
Warren Buffett usually addresses his investors at the end of February, so it is very likely that in the next few days the content of his new letter to Berkshire Hathaway shareholders will be known.
This is a practice that, according to Jeff Gramm, author of “Dear President,” is the “best way to learn about the business world.” Who better, but great presidents, to show you how to achieve a successful career in the business world?
The best letters of this type should reflect the long-term thinking of the author and show the results obtained over a long period of time, including difficult moments as well.
The more clarity they give, the better. Will Thorndike, author of The Outsiders, states that “the clarity and conciseness of these cards are often highly correlated with extraordinary returns.”
The advantages of such documents are the lack of regulation, the disclosure of important data to understand the operation of the company, and qualities such as trust or transparency.
Buffett cards are the best way to learn from the business world
This should not be lacking in a letter to shareholders
To go into more detail, here’s what a good shareholder letter should bring with it according to a recent Investing post:
-Be personal: they are optional documents and, therefore, exempt from regulation, which allows their authors to have more flexibility to personalize the message and enhance the companies value.
-Transmit confidence: Buffett is the teacher of all. His key to success is treating his readers as if they were his investment colleagues, his partners, investors to whom he owes a real explanation of the movements he has made with money..
-Highlight the good and the bad: give details on the evolution and perspectives of the business plan, but also offer data on the challenges the company faces, strategies and more. Explain the good, but also the bad, giving examples of things that may also have gone wrong. They should explain the challenges, not the triumphs.
Jeff Bezos will also send a letter to his shareholders in the coming months.
What is there to distrust
Phil Carret, an experienced investor, acknowledged in MarketWatch, “I would always distrust an excessively optimistic letter. You have to know the good, but also the bad, because the easy thing is to explain the good; and keep in mind another Buffett maxim,” praise by name; criticize by category ‘”.
Buffett wrote the following in his 1979 letter: “When you receive a communication ours, will come from the person you are paying to run the business. Its president firmly believes that owners have the right to hear directly from the CEO what is happening and how he evaluates the business, now and in the future. I would demand it in a private company, so expect no less from a public company. ”
Fortunately, he is not the only one who will give us his knowledge in this way.
Jeff Bezos, head of Amazon; Fairfax Financial’s Prem Watsa, who is nicknamed the “Buffett of Canada,” or Tom Gayner, the president of Markek and who they call the next Buffett, will send letters to their shareholders in the coming months.