Berkshire Hathaway 2022 Letter: Key Learnings

One of things I did this weekend was to read Warren Buffett's 2022 letter discussing Berkshire Hathaway. A few things stood out to me:

• When we open the letter, the first page is not the letter, but rather Berkshire Hathaway's performance against the S&P 500 since 1965. This cover page with two columns of data with annual percentage change is so simple yet powerful. This page tells his shareholders a lot of things - history of the company performance, S&P 500 performance, relative performance against a benchmark, and longevity as well as stability of his business. No fancy data visualization or predictions. Just simple and clean layout of actual performance.
• Buffett talked about having understanding of business mistakes but intolerance for personal misconduct.
• He discussed ownership --- ownership of businesses, ownership (a duty) in delivering returns to his shareholders, ownership (having skin in the game) in the risks undertaken by the businesses.
• Invest with a long time horizon. This requires conviction, discipline, hard work, patience, and a healthy dose of optimism. While he described buyouts and investments public equities, same values apply to venture capital. It takes about 10 years of hard work for most businesses to become a scaled business (especially in B2B). Of course, when the market is good, discipline and value-add from investors matter less. Now, these values are more important than ever because only the fittest will last and win. The market is much less forgiving.
• Buffett ended the letter talking about one of his businesses - See's Candies. We all have seen them in malls, airports, and other places. Berkshire Hathaway has been its owner since 1972! The product hasn't changed for over 100 years. Talking about longevity and building something that lasts.

My writings are my opinions and not investment advice.