25 Witty Quotes from Warren Buffett’s 2015 Annual Letter

Warren Buffett’s annual letter to shareholders is a treasure of financial advice to anyone who was, is, or wants to be an investor in his lifetime. Being issued for 51 straight years now, its release is undoubtedly one of the most anticipated events investors look forward to, each year.

What makes these letters exciting is not only Buffett’s take on American businesses and economy, but also his writing style. His writing very closely reflects the person he is - simplistic, content-rich, down-to-earth, and possessing a fantastic sense of humor. He manages to avoid jargon and explain complex business fundamentals with very relatable examples, anecdotes, and witty one-liners. Especially with the latter, he aptly uses his wit to put intricate mechanisms in a simple context. I’m personally a big fan of them, and if you are too, I’m sure we’re not alone.

Warren Buffett issued 51st annual letter to shareholders last week, and I’m listing most instances that I found to be worthy of addition to his bank of witty one-liners. Some may not appear funny or interesting if you’re not very familiar with the topic being discussed or Buffett himself, but for those moments, bear with me. You might find the next one spot-on.

1. On why he prefers a hands-off management philosophy:
“ With this hands-off style, I am heeding a well-known Mungerism: “If you want to guarantee yourself a lifetime of misery, be sure to marry someone with the intent of changing their behavior.” ”

2. On increasing influence of lobbyists in politics:
“ Congress will be the battlefield; money and votes will be the weapons. Lobbying will remain a growth industry. “

3. On Berkshire’s stake in Kraft Heinz:
“ The new company has annual sales of $27 billion and can supply you Heinz ketchup or mustard to go with your Oscar Mayer hot dogs that come from the Kraft side. Add a Coke, and you will be enjoying my favorite meal ”

4. On hostile takeovers:
“ To be sure, certain hostile offers are justified. We, though, will leave these “opportunities” for others. At Berkshire, we go only where we are welcome.”

5. On owning non-controlling stakes in public companies:
“ At Berkshire, we much prefer owning a non-controlling but substantial portion of a wonderful company to owning 100% of a so-so business. It’s better to have a partial interest in the Hope Diamond than to own all of a rhinestone. “

6. On being open to operating businesses as well as passive investments:
“ Woody Allen once explained that the advantage of being bi-sexual is that it doubles your chance of finding a date on Saturday night. In like manner – well, not exactly like manner – our appetite for either of them doubles our chances of finding sensible uses for Berkshire’s endless gusher of cash. “

7. On improvement in America's Standard of living over the last century:
“ All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn’t buy what we now take for granted. “

8. On adapting to change in technology, but not too much:
“ My parents, when young, could not envision a television set, nor did I, in my 50s, think I needed a personal computer. Both products, once people saw what they could do, quickly revolutionized their lives. I now spend ten hours a week playing bridge online. And, as I write this letter, “search” is invaluable to me. (I’m not ready for Tinder, however.) ”

9. On Buffett reporting on business performance for the year:
“ Our intent is to provide you with the information we would wish to have if our positions were reversed, with you being the reporting manager and we the absentee shareholders. (Don’t get excited; this is not a switch we are considering.) ”

10. Free GEICO advertisements in the letter:
“ Indeed, at least 40% of the people reading this letter can save money by insuring with GEICO. So stop reading – right now! – and go to geico.com or call 800-368-2734. “

11. On managements ignoring stock-based compensation as an expense while reporting Non-GAAP Earnings:
“ It has become common for managers to tell their owners to ignore certain expense items that are all too real. “Stock-based compensation” is the most egregious example. The very name says it all: “compensation.” If compensation isn’t an expense, what is it? And, if real and recurring expenses don’t belong in the calculation of earnings, where in the world do they belong? “

12. On CEOs understating depreciation expense's impact on company's profitability:
“ When CEOs or investment bankers tout pre-depreciation figures such as EBITDA as a valuation guide, watch their noses lengthen while they speak. “

13. On possible errors in Buffett’s judgement:
“ I will commit more errors; you can count on that. If we luck out, they will occur at our smaller operations. “

14. On America's improvement in productivity over last century:
“ It was fortunate that horses couldn’t vote. “

15. Confidence on GEICO eventually surpassing over StateFarm (and in himself being a centenarian):
“ On August 30, 2030 – my 100th birthday – I plan to announce that GEICO has taken over the top spot. Mark your calendar. “

16. On how present business risks can be overcome with adapting in future:
“ When we took over the company in 1965, its risks could have been encapsulated in a single sentence: “The northern textile business in which all of our capital resides is destined for recurring losses and will eventually disappear.” That development, however, was no death knell. We simply adapted. And we will continue to do so. ”

17. On businesses facing risks of natural/human catastrophe:
“ No one knows what “the day after” will look like. I think, however, that Einstein’s 1949 appraisal remains apt: “I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” “

18. On whether the industry should wait for more proof on Climate Change, before being prepared for it:
“ This issue bears a similarity to Pascal’s Wager on the Existence of God. Pascal, it may be recalled, argued that if there were only a tiny probability that God truly existed, it made sense to behave as if He did because the rewards could be infinite whereas the lack of belief risked eternal misery. “

19. On web-casting 2016 Annual meeting:
“ Charlie and I have finally decided to enter the 21st Century. “

20. On shareholders worldwide getting a chance to evaluate Buffett & Charlie (on-screen):
“ In making your evaluation, be kind: Allow for the fact that we didn’t look that impressive when we were at our best. “
21. On Buffett's lifestyle and intake of calories:
“ Viewers can also observe our life-prolonging diet. During the meeting, Charlie and I will each consume enough Coke, See’s fudge and See’s peanut brittle to satisfy the weekly caloric needs of an NFL lineman. “

22. On Buffett & Charlie’s eating habits:
“ Long ago we discovered a fundamental truth: There’s nothing like eating carrots and broccoli when you’re really hungry – and want to stay that way. ”

23. On Berkshire Managers participating in Berkshire 5k:
“ Entrants in the race will find themselves running alongside many of Berkshire’s managers, directors and associates. (Charlie and I, however, will sleep in; the fudge and peanut brittle take their toll.) “

24. Playing the smart salesman by giving people ways to save money and spend on Berkshire products:
“ If you are coming from far away, compare the cost of flying to Kansas City vs. Omaha. The drive between the two cities is about 21⁄2 hours, and it may be that Kansas City can save you significant money, particularly if you had planned to rent a car in Omaha. The savings for a couple could run to $1,000 or more. Spend that money with us. “

25. Signing off with confidence:
“ In 2015, no one joined us, no one left. And the odds are good that you will see a photo of the same 25 next year. “

Have any of these quotes reminded you of how they have/can be applied to your management philosophy, business, or investments? It sure reminds me of many. Let’s discuss how we can take these lessons and apply them in our lives. It is only then, that we can make them count.

Would you like to add any quotes that I missed? Feel free to pitch in with comments. They’re never too many.
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1. http://static5.businessinsider.com/image/56018ed1bd86ef19008bc2ca/22-mind-blowing-facts-about-warren-buffett-and-his-wealth.jpg, 
2. http://luminaexpress.com/wp-content/uploads/2013/03/Geico.jpg

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