Buffett’s 1987 letter- Per Share Value, Mr Market and Exceptional Managers

Описание: This episode explores Warren Buffett’s 1987 annual letter to the shareholders of Berkshire Hathaway a year that delivered strong financial results and meaningful lessons in business value. Buffett emphasizes the growth of Berkshire’s per share book value but reminds readers that true per share business value is what ultimately matters far more than simple accounting figures.
A major highlight of the letter is the remarkable performance of seven non financial business units whose exceptional returns were driven by extraordinary managers. Buffett underscores how great leadership and decentralized decision making continue to power Berkshire’s long term compounding engine.
The letter also reviews the company’s large insurance operations noting the industry’s inherent volatility shifting regulations and the essential role of disciplined underwriting. Buffett discusses Berkshire’s investment philosophy including the commitment to hold outstanding companies permanently and revisits Ben Graham’s timeless Mr Market allegory to illustrate rational investing behavior.
Buffett further explains Berkshire’s financing approach such as issuing debentures when attractive and concludes with clear criteria for evaluating potential acquisition targets emphasizing durable economics honest management and sensible pricing.
📈 Topics Covered:
• Growth of Berkshire’s per share business value in 1987
• Exceptional performance from seven major non financial business units
• The importance of great managers in long term value creation
• Insights into Berkshire’s insurance operations and industry volatility
• Buffett’s long term investment philosophy and the Mr Market allegory
• Financing strategies including the issuance of debentures
• What Buffett looks for in potential acquisition targets
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