馃攳
Warren Buffett: Important & Not Important in Annual Reports - YouTube
Channel: iValue Investing
[0]
i'd like your advice on how to
[2]
understand annual reports
[4]
what you look for what's important
[7]
what's not
[7]
important and what you've learned over
[9]
the years
[10]
from reading thousands of reports thank
[14]
you
[14]
we've read a lot of reports i will tell
[16]
you that and
[18]
we uh well we start by looking at the
[21]
reports of companies that we think
[23]
we can understand so we hope to find
[26]
we hope to be reading reports and i and
[28]
i do read hundreds of them every year
[30]
we hope to be reading reports of
[31]
businesses that are understandable to us
[33]
and then we
[34]
see from that report whether the
[37]
management is telling us about the
[38]
things that we would want to know about
[40]
if we owned 100 of the company
[42]
and when we find a management that does
[44]
tell us about those things
[46]
and that is candid in the same way that
[49]
a manager of a subsidiary would be
[51]
candid with us
[52]
and talks in language that we can
[54]
understand it
[56]
it definitely improves our feeling about
[58]
about investing in such a business and
[59]
the
[60]
and the reverse uh turns us off to some
[62]
extent so if we read a bunch of public
[64]
relations gobbledygook
[66]
you know and and we see lots of pictures
[68]
and no facts
[70]
uh it has some effect on our attitude
[74]
toward a business we want to understand
[76]
the business better when we get through
[78]
with the annual report than when we
[79]
picked it up
[81]
and that is not difficult for a
[82]
management to do if they want to do it
[85]
if they don't want to do it you know we
[88]
think that is a factor
[91]
in whether we want to be their partners
[92]
over a 10 10 year period or so
[94]
but we've learned a lot from annual
[96]
reports for example i would say that
[98]
the coca-cola annual report over the
[101]
last good many years
[102]
been an enormously informative document
[105]
i mean i can't
[106]
i i can't think of any way if i had a
[108]
conversation with roberto voizuetta or
[110]
now doug ivester
[112]
and they were telling me about the
[113]
business they would not be
[116]
telling me more than than than i get
[118]
from reading that annual report
[119]
we bought that stock based on on an
[121]
annual report we did not
[123]
buy it based on any conversation of any
[125]
kind with the top management of
[126]
coca-cola before we bought our interest
[128]
we
[128]
simply bought it on based on reading the
[130]
annual report plus our knowledge of how
[131]
the business worked
[133]
charlie yeah
[136]
i do think the if you've got a
[138]
standardized bunch of popular jargon
[141]
that looks like it came out of the same
[142]
consulting firm
[144]
i i do think it's a big turn off that's
[147]
not to say that
[148]
some of the consulting mantras aren't
[151]
right
[152]
but i think there's a lot to we're
[157]
sort of candid simple coherent prose
[161]
a lot to be said for almost every
[164]
business has
[165]
problems and we just assumed the manager
[166]
would tell us about them
[169]
we would we would like that in the
[170]
businesses we run in fact one of the
[172]
things we give very little advice to our
[174]
managers but one thing we always do say
[176]
is to tell us the bad news immediately
[177]
and and i don't see why that isn't
[180]
uh good advice for the uh the manager of
[182]
a public company uh
[184]
over time you know i'm positive it's the
[188]
best policy but
[190]
but a lot of companies for example have
[193]
investor relations people and they are
[195]
they're dying just to pump out what they
[198]
think is good news all the time and they
[200]
they have this attitude that you know
[202]
that you've got a bunch of animals out
[204]
there to be fed
[204]
and that they're going to feed them what
[206]
they want to eat all the time
[208]
and over time the animals learn so
[212]
it's we try and stay away from
[214]
businesses like that what you seldom see
[215]
in an annual report is a sentence like
[217]
this
[219]
this is a very serious problem and we
[221]
haven't quite figured out yet how to
[224]
how to handle it
[227]
but believe me that is an accurate
[230]
statement much of the time
[241]
you
Most Recent Videos:
You can go back to the homepage right here: Homepage