Shortly after writing the brief memo about the 2009 Berkshire Hathaway Shareholder Letter was released today, I sat down with a cup of coffee and started reading it as free time is limited today. Anyway, I usually read the letter a couple of times to fully grasp it. The following are some quotes that stood out . All these and more could be found in the 2009 Berkshire Hathaway Shareholder Letter on Berkshire Hathaway’s website located at http://www.berkshirehathaway.com/

2009 Berkshire Hathaway Shareholder Letter Quotes

• Our metrics for evaluating our managerial performance are displayed on the facing page. From the start, Charlie and I have believed in having a rational and unbending standard for measuring what we have – or have not – accomplished. That keeps us from the temptation of seeing where the arrow of performance lands and then painting the bull’s eye around it.
• Our defense has been better than our offense, and that’s likely to continue.
• If Charlie and I were to go into a small venture with a few partners, we would seek individuals in sync with us, knowing that common goals and a shared destiny make for a happy business “marriage” between owners and managers. Scaling up to giantsize doesn’t change that truth.
• If Charlie, I and Ajit are ever in a sinking boat – and you can only save one of us – swim to Ajit. (Referring to head of National Indemnity’s Ajit Jain)
• In earlier days, Charlie and I shunned capital-intensive businesses such as public utilities. Indeed, the best businesses by far for owners continue to be those that have high returns on capital and that require little incremental investment to grow.
• Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.
• Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. In the end, what counts in investing is what you pay for a business – through the purchase of a small piece of it in the stock market – and what that business earns
  in the succeeding decade or two.
• Charlie and I believe that a CEO must not delegate risk control. It’s simply too important.
• In my view a board of directors of a huge financial institution is derelict if it does not insist that its CEO bear full responsibility for risk control. If he’s incapable of handling that job, he should look for other employment. And if he fails at it – with the government thereupon required to step in with funds or guarantees – the financial consequences for him and his board should be severe.
• Charlie and I enjoy issuing Berkshire stock about as much as we relish prepping for a colonoscopy.
• In more than fifty years of board memberships, however, never have I heard the investment bankers (or management!) discuss the true value of what is being given.
• I can’t resist telling you a true story from long ago. We owned stock in a large well-run bank that for decades had been statutorily prevented from acquisitions. Eventually, the law was changed and our bank immediately began looking for possible purchases. Its managers – fine people and able bankers – not unexpectedly began to behave like teenage boys who had just discovered girls.
• Charlie and I like to meet you, answer your questions and – best of all – have you buy lots of goods from our businesses.

Warren Buffett On Housing

The industry is in shambles for two reasons, the first of which must be lived with if the U.S. economy
is to recover. This reason concerns U.S. housing starts (including apartment units). In 2009, starts were 554,000,
by far the lowest number in the 50 years for which we have data. Paradoxically, this is good news.
People thought it was good news a few years back when housing starts – the supply side of the picture
– were running about two million annually. But household formations – the demand side – only amounted to
about 1.2 million. After a few years of such imbalances, the country unsurprisingly ended up with far too many
houses.
There were three ways to cure this overhang: (1) blow up a lot of houses, a tactic similar to the
destruction of autos that occurred with the “cash-for-clunkers” program; (2) speed up household formations by,
say, encouraging teenagers to cohabitate, a program not likely to suffer from a lack of volunteers or; (3) reduce
new housing starts to a number far below the rate of household formations.
Our country has wisely selected the third option, which means that within a year or so residential
housing problems should largely be behind us, the exceptions being only high-value houses and those in certain
localities where overbuilding was particularly egregious. Prices will remain far below “bubble” levels, of course,
but for every seller (or lender) hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t
afford to buy an appropriate home a few years ago now find it well within their means because the bubble burst.

Related posts:

1. 2009 Berkshire Hathaway Shareholder Letter
2. 2010 Berkshire Hathaway Meeting Videos
3. Berkshire Hathaway Annual Meeting Festivities
4. Walter Schloss Letter to Warren Buffett