Warren Buffett is one of my heroes.
He’s a remarkably successful businessman. His company, Berkshire Hathaway, has posted spectacular growth since he took over in 1964. Wish I’d invested a few hundred bucks with him back then.
Over the last 44 years, book value has grown from $19 to $70,530, a rate of 20.3% compounded annually.
But what earns my respect even more, is Mr. Buffett’s ability to write clearly and persuasively. He writes what he means.
Here’s a sentence from a mutual fund prospectus – not his:
Maturity and duration management decisions are made in the context of an intermediate maturity orientation. The maturity structure of the portfolio is adjusted in anticipation of the cyclical interest rate changes.
Here’s Warren Buffett’s revision:
We will try to profit by correctly predicting future interest rates.
Now that’s a pure sentence. It’s not simplistic. Buffett’s not trying to dumb it down for us. Rather, he conveys clarity and honesty in an industry known for murky ethics.
“We will try to profit,” Buffett writes. That little three-letter word try represents millions of dollars in trust. People know he won’t always profit. And he knows they know that. So he writes what he means. He can’t promise he will always succeed. But he can promise he will always try.
In a recent shareholder letter, Mr. Buffett describes the successes Berkshire Hathaway achieved in the unstable economy. Then he writes:
That’s the good news. But there’s another less pleasant reality: During the year, I did some dumb things in investments. I made at least one major mistake and several lesser ones that also hurt. I will tell you more about these later. Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.
Who wouldn’t trust this guy? He skips the bull and tells it like it is.
So if you’re eager to start writing what you mean, invest an hour this weekend in Warren Buffett’s Shareholder Letters.
And put that inspiration to work in the next letter you write.