Berkshire Hathaway’s annual report has an insurmountable advantage—Warren Buffett
This season’s annual reporting may be flotsam and jetsam from a shipwrecked year, but I enjoyed reading one chairman’s letter: that of the world’s richest man, Berkshire Hathaway’s Warren Buffett.
Writing one that shareholders would actually read is less common. Writing one that’s a good read and creates good will, especially when news is B-A-D, is as rare as snakes in New Zealand. My observations about what works:
1. Explains important points in detail. Today’s typical 500- to 600-word chairman’s letters are so broad as to be meaningless. Buffett’s letter runs 12,000 words (not including charts) and is a quarter of BH’s 100-page annual report (or ‘recital’ as Buffett calls it). That’s 15 to 30 times longer than most blue-chip chair letters. Rule makers may say that’s bad, but Buffett makes it work.
2. Less legal mumbo jumbo. In another company’s report, a 1,000-word chairman’s letter is footnoted with 1,289 words of “Important Notes.” Without a lawyer handy, I paraphrased those Notes as best as I could:
Is this really necessary? Does it need to be front inside cover?