March 4, 2014 (DJIA 16,168.03  , S&P500  1,873.91  )      My favorite excerpts from Warren Buffett 2013 Shareholder Letter
 

Warren Buffett's annual shareholder letters are always some of my favorite readings. This years, released this past Saturday, looks to be one of my favorites.

Here are four of my favorite excerpts from this years letter:

1. "When Wall Streeters tout EBITDA as a valuation guide, button your wallet."

2.""...it is important to realize that Bank of America is in effect our 5th largest equity position and one we value highly."

3. “I learned most of the thoughts in this investment discussion from Ben Graham’s book The Intelligent Investor, which I bought in 1949. My financial life changed with that purchase.”

The following is something I have been studying extensively:

4. "Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn’t afford. Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made that conflicted with a willingness to fund them. Unfortunately, pension mathematics today remain a mystery to most Americans.

Investment policies, as well, play an important role in these problems. In 1975, I wrote a memo to Katharine Graham, then chairman of The Washington Post Company, about the pitfalls of pension promises and the importance of investment policy. That memo is reproduced on pages 118 - 136.

During the next decade, you will read a lot of news – bad news – about public pension plans. I hope my memo is helpful to you in understanding the necessity for prompt remedial action where problems exist."

You can read his shareholder letters at this link:

http://berkshirehathaway.com/letters/letters.html


Ron
 
Ronald R. Redfield  cpa, pfs
Redfield, Blonsky & Co. LLC
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