I devoured 50 years of Warren Buffett shareholder letters.

The result?

12 timeless principles from the greatest investor in the world.

Here are the golden nuggets🧵

The Orangutan Effect

"If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will exit thinking more clearly yourself."

Teaching others actually teaches yourself.

2022

The Faulty Premise Framework

“A horse that can count to ten is a remarkable horse - not a remarkable mathematician.”

Beware your comparison set.

Are you judging crappy relative performance or absolute results?

1985

Pick the Right Business Boat

The business boat you get into is more important than how effectively you row.

“When a brilliant management team tackles a business with a reputation for poor fundamental economics, the reputation of the business usually stays intact.”

1985

A Rising Tide Doesn't Lift All Bonuses

"Good performance should be rewarded whether Berkshire stock rises or falls.
Average performance should earn no special rewards even if our stock soars."

Judge for individual performance or risk free riding on group success.

1986