Learnings from the Berkshire Hathaway Shareholder Letter 1978

My key learnings from Warren Buffet's 1978 letter to the shareholders of Berkshire Hathaway:

1. UFHC:
a. Understand
b. Favourable long-term prospects
c. Honest and competent management
d. Cheap

Essentially, you want to look for 'Good quality businesses with a Margin of Safety'.


2. People who think and feel like owners work harder, more happily, and more effectively.

3. Praise good quality people.

4. Willingly accept and learn from your errors.

5. Return on Capital Employed (ROCE) is a measure of profit relative to investment:

ROI = PROFIT / Investment