Warren Buffett's Annual Letter: The Oracle of Omaha Shares Some Wisdom

February 27, 2011

Warren Buffett's Annual Letter: The Oracle of Omaha Shares Some Wisdom

Warren Buffett’s annual letter to Berkshire Hathaway shareholders is out.

In it, he speaks of opportunity. For example, he informs: “Our elephant gun has been reloaded, and my trigger finger is itchy”.

Buffett's annual letter is always an interesting read ... even if you don’t agree with everything he says. There is a reason he is called “the Oracle of Omaha.” Even the introduction had a few of the ideas that jumped off the page.

“Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” ... No matter how serene today may be, tomorrow is always uncertain.

Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.”

He later reminds: "At Berkshire, our time horizon is forever". That perspective makes it a lot easier for the game not to end until you've won.

Further, the Pragmatic Capitalist highlights this lesson:

Nothing stopped so many innovators and entrepreneurs more than the fear of failure. If you allow yourself to be constantly scared into thinking that the world is doomed you will never take that risk which might result in great reward. And perhaps worse, if you never fail you will never learn to get up, brush yourself off, move on and succeed in the future. This does not mean you should wander through this world with great complacency and blind optimism, but if you deny yourself the ability to maximize your full potential, you will always come up short.

Here is a link to what others are saying about this year's letter.