2020 Shareholder Letter

Berkshire Hathaway

Warren Buffett

Research

14 Pages

Berkshire Hathaway reflects on its investment philosophy and long term performance, emphasizing disciplined capital allocation and the power of compounding over decades. The letter highlights how a small number of major investments have driven a significant portion of returns, reinforcing a concentrated and patient approach.

Key Takeaways

Long Term Compounding Power: Berkshire compounded book value at ~20% annually from 1965 to 2020, far exceeding broader market returns.
Concentrated Winners Matter: A handful of investments contributed over 75% of cumulative gains, showing outsized impact from top positions.
Capital Allocation Discipline: Over $24 billion was deployed into share repurchases in 2020, reflecting a shift toward returning capital when opportunities are limited.
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