By Robert Miller | Portfolio Manager at NAOS Asset Management

The 2020 Berkshire Hathaway Inc annual report was released at the end of February. As always, it contains the shareholder letter written by Chairman & CEO, Warren Buffett. The Buffett lessons, always delivered in plain & simple English, with plenty of analogies, history lessons and reinforcements of prior lessons, can be of use to any investor.

This year’s letter appears to be written with a somewhat reflective tone. In the 2020 letter Buffett talks through his thoughts on business conglomerates, shareholders, the power of buybacks when done correctly, his early days of his investment partnerships (pre Berkshire) and highlights what some may have potentially forgotten - there are great businesses in American outside of the technology companies in Silicon Valley. He also reveals that Berkshire Hathaway has the largest asset base of any US company.

The below excerpt from the letter highlights a practise of creating an investment philosophy, sticking to it and not chopping and changing. We are believers in this mentality at NAOS.

“In 1958, Phil Fisher wrote a superb book on investing. In it, he analogised running a public company to managing a restaurant. If you are seeking diners, he said, you can attract a clientele and prosper featuring either hamburgers served with a Coke or a French cuisine accompanied by exotic wines. But you must not, Fisher warned, capriciously switch from one to the other: Your message to potential customers must be consistent with what they will find upon entering your premises. At Berkshire, we have been serving hamburgers and Coke for 56 years.”

Link to letter