The Road Ahead

The Road Ahead

Three decades ago, my Midwestern friend, Joe Rosenfield, then in his 80s, received an irritating(ˈiriˌtādiNG) letter from his local newspaper. In blunt(blənt) words, the paper asked for biographical(ˌbīəˈɡrafəkəl) data it planned to use in Joe’s obituary(ōˈbiCHəˌwerē). Joe didn’t respond. So? A month later, he got a second letter from the paper, this one labeled “URGENT.”

Charlie(ˈCHärlē) and I long ago entered(ˈen(t)ər) the urgent zone(zōn). That’s not exactly great news for us. But Berkshire(ˈbərkSHər) shareholders need not worry: Your company is 100% prepared for our departure(dəˈpärCHər).

The two of us base our optimism(ˈäptəˌmizəm) upon five factors. First, Berkshire’s assets(ˈaset) are deployed in an extraordinary variety(vəˈrīədē) of wholly(ˈhōl(l)ē) or partly-owned businesses that, averaged out, earn attractive(əˈtraktiv) returns on the capital they use. Second, Berkshire’s positioning of its “controlled” businesses within a single entity(ˈen(t)ədē) endows(inˈdou) it with some important and enduring(inˈd(y)o͝oriNG) economic advantages. Third, Berkshire’s financial(fəˈnan(t)SHəl) affairs(əˈfer) will unfailingly(ˌənˈfāliNGlē) be managed in a manner allowing the company to withstand external shocks of an extreme(ikˈstrēm) nature. Fourth, we possess(pəˈzes) skilled and devoted top managers for whom running Berkshire is far more than simply having a high-paying and/or prestigious(preˈstējəs) job. Finally, Berkshire’s directors – your guardians – are constantly focused on both the welfare(ˈwelˌfer) of owners and the nurturing(ˈnərCHər) of a culture that is rare(rer) among giant corporations. (The value of this culture is explored in Margin(ˈmärjən) of Trust, a new book by Larry Cunningham(ˈkəniNGham) and Stephanie Cuba(ˈkyo͞obə) that will be available at our annual(ˈany(o͞o)əl) meeting.)

Charlie(ˈCHärlē) and I have very pragmatic(praɡˈmadik) reasons for wanting to assure(əˈSHo͝or) Berkshire’s prosperity(präˈsperədē) in the years following our exit(ˈeɡzət): The Mungers have Berkshire holdings that dwarf(dwôrf) any of the family’s other investments, and I have a full 99% of my net worth lodged(läjd) in Berkshire stock. I have never sold any shares and have no plans to do so.

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https://www.berkshirehathaway.com/letters/2019ltr.pdf