Monday, December 28, 2009

Highly Probables: Berkshire Shareholder Letter Highlights

Warren Buffett wrote the following in the 1996 Berkshire Hathaway (BRKa) shareholder letter:

Of course, Charlie and I can identify only a few inevitables, even after a lifetime of looking for them. Leadership alone provides no certainties: Witness the shocks some years back at General Motors, IBM and Sears, all of which had enjoyed long periods of seeming invincibility. Though some industries or lines of business exhibit characteristics that endow leaders with virtually insurmountable advantages, and that tend to establish Survival of the Fattest as almost a natural law, most do not. Thus, for every inevitable, there are dozens of impostors, companies now riding high but vulnerable to competitive attacks. Considering what it takes to be an inevitable, Charlie and I recognize that we will never be able to come up with a Nifty Fifty or even a Twinkling Twenty. To the inevitables in our portfolio, therefore, we add a few "highly probables."

In the letter, he refers to Coca-Cola (KO) and Gillette (now part of Procter & Gamble:PG) as "The Inevitables".


Long BRKb, KO, and PG
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