Warren Buffett attributes investment success to 'a dozen truly good decisions'
Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) chief Warren Buffett attributed the company's "satisfactory results" in investing to "about a dozen truly good decisions — that would be about one every five years."
"Over time, it takes just a few winners to work wonders," he wrote in his annual letter to shareholders. "And, yes, it helps to start early and live into your 90s as well."
Examples of such successful investments were Coca-Cola (KO) and American Express (AXP), Buffett highlighted, emphasizing the companies' increasing dividends, as well as the increase in their stock values. Illustrating the point: Berkshire (BRK.B) paid $1.3B for Coca-Cola stock in 1994. The cash dividend from that stock grew from $75M in 1994 to $704M by 2022. At year-end, the KO investment was valued at $25B.
Buffett assured the company's shareholders that Berkshire will always hold to its bedrock principles.
"As for the future, Berkshire will always hold a boatload of cash and Treasury bills along with a wide array of businesses," Buffett wrote. "We will always avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses. Our CEO will always be the Chief Risk Officer — a task it is irresponsible to delegate."
He also promised that any future CEOs will also have a significant part of their net worth in Berkshire (BRK.B) shares, "bought with their own money."
The letter also highlighted the company's payment of $32B in corporate income tax to the U.S. in the decade ended in 2021, almost a tenth of 1% of the $32.3T the U.S. Treasury collected during that time.
"And that mean — brace yourself — had there been roughly 1,000 taxpayers in the U.S. matching Berkshire's payments, no other businesses nor any of the country's 131M households would have needed to pay any taxes to the federal government. Not a dime," Buffett wrote.
He ended the letter, saying the annual meeting will be in Omaha on May 5-6. "We will have a good time and so will you," he said.
Earlier, Berkshire Hathaway Q4 operating earnings slip Y/Y, stock buybacks jump