Business Tycoon Warren E. Buffet commemorate his golden anniversary with Berkshire Hathaway Inc. (NYSE:BRK.A) in a 24,000 letter, where he reflect on his journey with once a ‘fledgling textile manufacturer’.
In the letter Mr. Buffet reflects on some of the more memorable memories in Berkshire’s illustrious history. Describing his time as a minority shareholder of Berkshire he said, then CEO Seabury Stanton wanted to buy back Buffets share at lower price than he expected. He wrote, “I bristled at Stanton’s behavior and didn’t tender. That was a monumentally stupid decision”.
He also mentioned that he regrets for paying so much for Berkshire stocks at that time, as he wrote, “Buying the stock at that price was like picking up a discarded cigar butt that had one puff remaining in it. Though the stub might be ugly and soggy, the puff would be free. Once that momentary pleasure was enjoyed, however, no more could be expected”. Even when Berkshire’s stock fell, Mr. Buffett kept buying and in due course took control of the company.
Buffet said one of his mistake was to commit much of his resources to a dying business. He wrote, “I quickly compounded the error”. But he describe one of his biggest mistake as when he bought another textile company in in New England, which he had to shut down few years later. Mr. Buffet wrote, “And now some good news: The northern textile industry is finally extinct. You need no longer panic if you hear that I’ve been spotted wandering around New England”.
Mr. Buffet also mentioned how meeting Charlie Munger now Berkshire’s Vice Chairman and Mr. Buffett’s closest adviser changed him. He recalled how he meet him in his grandfather’s grocery stores. Mr. Munger grown up few hundred meters from the store. When talking about Mr. Munger, “In 56 years, however, we’ve never had an argument,” Mr. Buffett said. “When we differ, Charlie usually ends the conversation by saying, ‘Warren, think it over and you’ll agree with me because you’re smart and I’m right’”.
Mr. Buffet described as one his success came in 1972 when Berkshire had the chance to acquire See’s Candies for $25 million. He said, “To date, See’s has earned $1.9 billion pretax, with its growth having required added investment of only $40 million. See’s has thus been able to distribute huge sums that have helped Berkshire buy other businesses that, in turn, have themselves produced large distributable profits (Envision rabbits breeding.)”.
Mr. Buffet said he had made the same mistake more than once. Market analysts say, with all his mistakes Mr. Buffet boost Berkshires stock more than 1.8 million percent in 50 years.
