2 Annual Letters and Warren Buffett’s Hero

When I was in my teens Momma PoP told me that there were two authors that I should read if I wanted to understand investing. We’ll get to the second author at the end of this post, but it shouldn’t surprise anybody that the first was Warren Buffett. Over the years I’ve printed out and read through each of his 50 plus annual reports; they’ve formed the backbone of our investing strategy and are just great reading.

This year’s letter is no different (download it out here). The highlights for me this year are Buffett’s thoughts on his 10 year, million dollar bet with a hedge fund manager, as well as a reminder that,

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If I was a better writer, I’d tie this picture to some sort of investing lesson or fable. But which one!?

“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”

He was speaking about himself and Charlie, but Mrs. PoP and I take this advice to heart as well. Friends are making good money flipping houses or joining tech startups and it’s tempting to join in. On the other hand, we know that sooner or later this run will end, and we’ll be there once more, waiting with our washtub.

But Buffett’s letter isn’t the only one in town! For the last few years I’ve loved reading the annual letter from the Bill and Melinda Gates Foundation. Gates and Buffett have had a close friendship for decades; Bill is on the board of Berkshire and Buffett has pledged nearly all of his wealth to their foundation when he dies.

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In Yosemite you get tired of unpacking your camera every time you see something like this.

This years letter from Bill and Melinda is a letter of thanks to Buffett as well as a fantastic ROI analysis on their foundation. It’s fascinating to watch Bill and Melinda talk about money in a way where the ROI is the number of lives saved instead of how much more money is acquired. Mrs. Pop and I donated to charity for the first time in 2016, and used GiveWell to guide our gifts. We think that giving that is guided by rationality and data instead of feelings and marketing has a bright future, and the Gates foundation is leading the way.

It’s clear that Warren Buffett is a hero of Bill and Melinda, but who is Warren Buffett’s hero? In this year’s letter Buffett calls out the other person who Momma PoP told me to read all those years ago…Jack Bogle!

“If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle…He is a hero to them and to me.”

Jack doesn’t do a annual letter, but you can read what he thinks about being called a hero, as well as his thoughts on current market valuations and growth rates right here.

So what have you guys been reading this past month?

2 comments to 2 Annual Letters and Warren Buffett’s Hero

  • Levi

    Started Predictably Irrational by Dan Ariely, great read so far and seems to make its way through the PF groups. I love the BH annual letters, its amazing how much you can get a sense of buffet through his writings. Although I have gone way over my lunch period getting sucked into them!

  • Mama PoP

    I think the turtle pic should certainly be about “Slow and steady win the race!” That is the basis to most of my investing and so far it’s worked.

    It’s nice to get credit for guiding you to great investing reads that helped to form your financial strategy. However, you and Mrs. Pop have taken things to a new level and I am so proud of what you have accomplished. It has had a significant effect on your lifestyle and I believe has enhanced your happiness as you pursue specific and well articulated life goals.