Warren Buffett’s annual letters to Berkshire Hathaway shareholders are better than books on business written in the world of investing. Buffett’s letters go deep into the investment of the Oracle of Omaha for the past several decades. Buffet has identified valuable companies and purchased stakes in them, such as Coca Cola, American Express, Apple, General Motors, etc. Such interesting things come to know with how the last bark of Berkshire was in the latest letter released by Buffet on Saturday.
$ 11 billion mistake
Warren Buffett said he made a mistake by shopping at Precision Castparts Corp in 2016. It manufactures equipment for the aerospace and energy sectors. After a severe setback to the aviation sector, the company had to write down about $ 11 billion, mostly related to the same purchases. Buffett said the $ 11 billion write-down in his GAAP figure was a result of the same mistake he made in 2016. He said that year Berkshire bought Precision Castparts (“PCC”) and paid too much for the company. Nobody misled them. He was directly overly optimistic about PCC’s profit potential.
Stay away from bond
Buffett has written in his annual letter that very low interest rates around the world have reduced the attractiveness of the bond market. Bonds are not right nowadays. He wrote that can you believe, the most recently available income from a 10-year US tragery bond was at the end of the year at a 0.93 per cent yield, a decline of 94 per cent from the 15.8 per cent available in September 1981.
No one like us
The billionaire investor encouraged investors to believe in the Great American Dream. He wrote that in his 232-year presence, no human being like America is going to lose its potential. Despite some obstacles, the country’s economic progress has been spectacular. Therefore, the result is never to put against America.