WARREN BUFFETT 2064130.JPG
Center-Center-DelhiIt is usually a February phenomenon. Warren Buffett writes the letter to shareholders in the last week of February each year. This year, he chose a 'Thanksgiving' letter and announced that he would not be writing the usual 'letter to shareholders' going forward. However, he will continue to send a 'thanksgiving' message.
Over the years, Buffett has produced arguments that are lessons in investing. It is clear from his letters that he does not think much about gold as an investment. He believes in getting rich ‘slow ‘and refused to participate in the dotcom boom of the 2000s. Till the middle of the 2010s, he did not own a single technology share. Last quarter, Berkshire Hathaway, the firm he had managed for decades, invested in Alphabet, the parent company of Google. It is only the second technology company after Apple that the firm has invested in over the past decades. When everyone was petrified about buying equities, Buffett and Berkshire made the most of those stock market panics to build a fortune.
He participated in the bailout of central US banks along with the US government during the 2008 global financial crisis. When share prices are at a record high, Berkshire Hathaway is sitting on a cash pile of nearly $400 billion, just under 10% of India's GDP. This column can safely make a prediction. Many pundits are anticipating a significant decline in US shares as the frenzy over artificial intelligence companies subsides. Yet again, Berkshire Hathaway will make use of the opportunity.
Just as with many of the letters Buffett wrote to shareholders, the one he released last week has something for you, too. No matter where you are in your financial journey, Warren Buffett's investment literature is essential. It is not in the books about him or in what others think of him. It is primarily in these direct messages that he carefully crafted each year. This letter, too, is no exception.
Your luck plays a key role in your financial future, he argues. For example, he thinks he was blessed to be born in a wonderful family in the United States. Buffett strongly believes that Berkshire Hathaway's success was possible only in the United States. While it may not be possible for you to scale those absolute values, you may want to ride on the start you're given. The onus is on you to make the most of it.
The art of patience is a key. Everyone wants to get rich quickly, but very few want to get rich slowly. There is a significant philosophy riding in that sentence. There are no free lunches. You must remain patient and ride through market cycles to make a fortune. For example, many of you tend to stop even systematic investment plans that invest in large-cap companies during a financial downturn. You must trust the best companies in the Nifty 50 to come out of the crisis better than you and me. That is simply because they are better equipped to do so. No rocket science here. Just common sense.
The other important thing he highlights is learning from mistakes. You cannot beat yourself down constantly for making a few investment mistakes. These could be buying or selling for sentimental reasons, or going with the flow. You have to learn from such mistakes and use a measured approach towards investing in the future.
Buffett has pledged to support good causes with his fortune. He insists that you should eventually use your food fortune for the good of society. There are very few in the world who talk about the goodness of capitalism. For him, it will always be a force of good.