Warren Buffett Speaks: Wit and Wisdom from the World’s Greatest Investor

Chapter . About Running a Business

Communicate Well

How does Buffett write such clear and candid annual reports, especially since they have no graphs or photos? He writes as if for someone he knows.

“I just assume my sister owns the other half of the business and she’s been traveling for a year. She’s not business-ignorant, but she’s not an expert either. I don’t see anything wrong with graphics. It’s just that I think there is a tendency when people emphasize, to deemphasize real information.”^[1]

“If you understand an idea, you can express it so others can understand it. I find that every year when I write the report, I hit these blocks. The block isn’t because I’ve run out of words in the dictionary. The block is because I haven’t got it straight in my own mind yet. There’s nothing like writing to force you to think and to get your thoughts straight.”^[2]

Berkshire’s high share price is one way of communicating to people that Buffett wants serious investors who acquire the shares for the long term. He wants people to know what they’re getting into:

“We could stick a sign outside this hall tonight and put ‘rock concert’ on it, and we’d have one kind of crowd come in. And we could put ‘ballet,’ and we’d have a somewhat different kind of crowd come in. Both crowds are fine. But it’s a terrible mistake to put rock concert out there if you’re going to have a ballet, or vice versa. And the only way I have of sticking a sign on Berkshire, as to the kind of place I’m asking people to enter, ...