- Warren Buffett commends Apple CEO Tim Cook in his annual letter to Berkshire Hathaway shareholders.
- The investor discusses interest rates, tuition and the lack of bargaining in the financial markets.
- Buffett insists he buys businesses and does not bet on short-term moves in stocks.
Warren Buffett praised Apple CEO Tim Cook, criticized companies that deceptively adjust their earnings, and reiterated his long-term investment outlook in his annual letter to Berkshire Hathaway shareholders published Saturday.
The billionaire investor and CEO of Berkshire also outlined his frustration with holding cash instead of owning businesses, emphasizing the effect of interest rates on property valuations, and reflecting on his years of teaching.
Here are Buffett’s 7 best quotes from his latest shareholder letter:
1. “Charlie and I are not stock pickers, we are business pickers.” (Buffett noted that he and his trading partner, Charlie Munger, buy stocks based on their own expectations of long-term business performance, not in anticipation of short-term market moves. He is also confused about the timing of Berkshire’s activation. Will be answering- Blizzard bet.)
2. “Tim Cook, Apple’s illustrious CEO, regards users of Apple products as their first love, but all of his other constituencies benefit from Tim’s managerial touch as well.” (Buffett highlights Berkshire’s claim of nearly $800 million in annual dividends from Apple, its growing stake due to the iPhone maker’s stock buyback, and $5.6 billion of Apple’s earnings on paper.)
3. “Deceptive ‘adjustments’ to earnings – to use a polite description – have become both more frequent and more fictitious as stocks rise. Speaking less politely, I would say that bull markets bloated bulls.” generate.”
4. “Charlie and I have endured similar cash-heavy positions from time to time in the past. These periods are never pleasant, they are also never enduring.” (Buffett emphasized that Berkshire’s $144 billion cash pile was “not some neurotic expression of patriotism,” and that he prioritized own business at the right price.)
5. “Long-term interest rates that are low push the prices of all productive investments upward, be it stocks, apartments, farms, oil wells, whatever. Other factors also affect valuations, but interest rates Will always be important.”
6. “Teaching, like writing, has helped me develop and articulate my thoughts. Charlie calls this phenomenon the orangutan effect: if you sit with an orangutan and carefully consider one of your cherished thoughts You might leave behind a puzzled primate, but you’ll find yourself thinking more clearly out there.”
7. “On the way out, my grandson’s fifth-grade class was my toughest audience. The 11-year-old was whispering in his seats and staring blankly at me until I mentioned Coca-Cola and its famous secret formula. Immediately, every The hand went up, and I learned that the ‘secrets’ are catnip for babies.”
Read more: Warren Buffett’s Berkshire Hathaway is facing huge inflation and interest rate hikes. Veteran analyst Luis Toras explains how it will overcome those challenges — and warns that many investors will succumb to them.