Berkshire Hathaway's 1966 Letter To Shareholders

Mar 3 2014, 10:47am CST | by

Berkshire Hathaway's 1966 Letter To Shareholders
Photo Credit: Forbes Business

I cast my peepers over Berkshire Hathaway’s 1966 shareholder letter this weekend, and based on my analysis, I am rating it a STRONG BUY/OUTPERFORM.  You can purchase the stock for under $20 per share as of 12/13/1966.

I know what you’re thinking.  ”Phil — a famous Benjamin Graham cracker like you — have you been smoking LSD?  Why would we buy a stock that is in outer space?  Just a couple of years ago it was selling for under $10.  Wait for it to come back down to earth, man.   After all, we’re safe as houses with Nifty-Fifty stocks like Polaroid and Sears.”

Ordinarily, I would agree with you.  But I am in possession of some inside information.  This stock is the lost Dutchman mine of Blackbeard’s Knights Templar.  Send in your box top and score all you can.  If you don’t, you’ll be bummed out.

Berkshire has recently come under the thumb of a  crew-cut whiz-kid named Warren Buffett, who hails from Omaha, Nebraska.  I have it on good authority that he ghost-wrote the annual letter.   Now I don’t know his motives — maybe he wants to become the “Textile King” and tool around in a Sedan Deville and bellbottoms.   But — maybe not.

What’s his bag?  Buffett runs an investment partnership that has posted some bodacious numbers.   This cat’s one groovy stock picker.  And look what he says right here in his letter: “…the Company has been searching for suitable acquisitions within, and conceivably without, the textile field.”  The company includes in its working capital “ …$5.4 million of marketable securities, composed of short-term municipal bonds, commercial paper, and common stock.

Then he lays it on us with a Beatle beat.  Buffett says, “
…it is the present intention of the directors to proceed toward the interim investment of a major portion of these funds in marketable common stocks . . . to participate in earnings derived outside of our textile business.”/>

Let me beam young Buffett a brainwave.  The rag business is nowheresville.  Take whatever earnings you can scrape together and allocate your capital elsewhere.  For example, have you considered insurance?  What about credit cards and newspapers and utilities and railroads?  Good Golly Miss Molly, even a candy company will do better than these ancient textile mills.

Berkshire has announced a very mellow dividend of ten cents per share.  Don’t Bogart that dividend, Warren!   Fat chance: I confidently predict this dividend will rise every year for decades to come.  You can write that one in Day-Glo.

Meanwhile…I’m thinking: Buffett might shutter his private investment partnership in a few years.  Then he could take the helm of Berkshire Hathaway full-time.  At that point, his psychedelic noodling will go straight to Berkshire’s bottom line.  If I’m right, one day his annual meeting could even become known as the ‘Hootenanny of Capitalism.’

* * *

[Note to Readers: I came up empty this week so I am recycling an old column from the archives.]

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Egypt mufti's adviser slams killing of US journalist
Cairo, Aug 20 (IANS) Ibrahim Negm, advisor to the mufti of Egypt, Wednesday denounced the beheading of US journalist James Foley by the Islamic State (IS) Sunni extremist group in Iraq, state-run MENA news agency reported.
 
 
White House says beheading video authentic
Washington, Aug 20 (IANS/EFE) The Barack Obama administration Wednesday confirmed the authenticity of a video showing the decapitation of a US journalist who was abducted in November 2012 while covering the civil war in Syria.
 
 
World appalled by American journalist's beheading: Obama
Washington, Aug 21 (IANS) The entire world is appalled by the brutal murder of American journalist James Foley, US President Barack Obama said Wednesday.
 
 
Fareed Zakaria faces fresh plagiarism charges
Washington, Aug 20 (IANS) Indian-American journalist Fareed Zakaria, who two years ago got away from a plagiarism controversy claiming he made a "terrible mistake", is facing fresh plagiarism charges from anonymous internet watchdogs.
 
 
 

Latest from the Network

Nicki Minaj gives lap dance to Drake in video
New York, Aug 21 (IANS) Rapper Nicki Minaj has spiced up the video of her song "Anaconda" with a lap dance for Canadian rapper Drake. The new clip features Minaj and some more ladies. In the climax, Drake gets a lap...
Read more on Celebrity Balla
 
Zac Efron and Michelle Rodriguez split
Zac Efron and Michelle Rodriguez have split up. The 26-year-old actor and the 36-year-old actress, who were first spotted kissing on holiday in Sardinia, Italy in early July, have reportedly ended their romance after...
Read more on Celebrity Balla
 
Emma Stone to star in 'Cabaret'
Emma Stone will officially make her Broadway debut in 'Cabaret.' The 'Amazing Spider-Man' actress has signed on to take over the lead role of Sally Bowles from Michelle Williams in the New York production and will take...
Read more on Celebrity Balla
 
Dave Grohl and wife welcome third daughter
Dave Grohl's wife has given birth to their third child. The Foo Fighters star and Jordyn Blum, whom he married in 2003, quietly welcomed daughter Ophelia into the world earlier this month. The happy news comes at a...
Read more on Celebrity Balla
 
London warns of threat from British fighters in Syria, Iraq
London, Aug 20 (IANS/EFE) British Foreign Secretary Philip Hammond warned Wednesday of the "threats" posed by a "significant number" of Britons working with jihadis in Syria and Iraq, as he condemned the video of the...
Read more on Politics Balla
 
Hungary honours Nobel laureate, Rubik's cube inventor
Budapest, Aug 20 (IANS) Hungarian President Janos Ader presented Nobel laureate author Imre Kertesz and inventor Erno Rubik with the Order of Saint Stephen, Hungary's highest award, Wednesday. The award marks the...
Read more on Celebrity Balla
 
Pakistan SC issues notice to Imran, Qadri (Fourth Lead)
Islamabad, Aug 20 (IANS) The Pakistan Supreme Court Wednesday restrained Pakistan Tehreek-i-Insaf (PTI) chairman Imran Khan and Pakistan Awami Tehreek (PAT) chief Tahir-ul-Qadri from illegal and unlawful trespassing of...
Read more on Politics Balla
 
Egypt mufti's adviser slams killing of US journalist
Cairo, Aug 20 (IANS) Ibrahim Negm, advisor to the mufti of Egypt, Wednesday denounced the beheading of US journalist James Foley by the Islamic State (IS) Sunni extremist group in Iraq, state-run MENA news agency...
Read more on Ad Balla
 
Pakistan SC restrains Imran, Qadri amid political crisis (Roundup)
Islamabad, Aug 20 (IANS) The Pakistan Supreme Court Wednesday restrained Pakistan Tehreek-i-Insaf (PTI) chairman Imran Khan and Pakistan Awami Tehreek (PAT) chief Tahir-ul-Qadri from illegal trespassing of prohibited...
Read more on Politics Balla
 
White House says beheading video authentic
Washington, Aug 20 (IANS/EFE) The Barack Obama administration Wednesday confirmed the authenticity of a video showing the decapitation of a US journalist who was abducted in November 2012 while covering the civil war...
Read more on Ad Balla