The chapter covers the topic of companies paying out dividends for holdings that cannot be redeployed into the company profitably. The speaker explains that these holdings are valuable and are not reflected in the company's financial statements. They also discuss the growth potential of these businesses through reinvesting capital.
For over 50 years, Warren Buffett has written an annual letter to Berkshire Hathaway's shareholders. Many people set it as a goal to read all of Warren’s shareholder letters chronologically. Which is certainly a fascinating way to see how Berkshire Hathaway evolved year after year.
This book is different. It breaks from this chronological order to instead group things Warren has said over the years by topic. So, for instance, you can see his ideas on the importance of culture or the power of incentives holistically — as a single body of work.
What I love about this book is the focus on Warren’s ideas. Warren Buffett has built one of the largest conglomerates in history — full I’d incredible companies from See’s Candies to GEICO — from a standing start in 1965. I would argue that if you only have time to study one entrepreneur and investor, that you should study Warren Buffett.
There’s no better way to do that than with this book. I know it’s one I’ll be rereading for the rest of my life.
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