Last weekend, two items were published that immediately jumped to the front of my reading list: Buffett’s 2017 Shareholder Letter and GE’s 2017 Annual Report.

I’ve been working through the GE report and have a meeting with management today with the first set of my questions, so I hope to update you on my progress soon.

For Buffett’s letter, I recently found a PDF mark-up tool called “Drawboard” that allows me to write in electronic ink on PDF documents. This is a great tool for people like me who spend a lot of time reading through PDFs and I’m glad I finally found it (Drawboard is owned by Microsoft, in case you were wondering).

I’m posting my annotated copy of Buffett’s 2017 shareholder letter here. The items that stood out to me the most were:

  1. Buffett’s references to structural and behavioral issues. There’s good reason why we start the Framework 100-Series course with a study of these topics. Valuation and structuring are pretty easy and mechanical; dealing with the psychology of investing and not getting caught up in the games of the Investing-Industrial Complex is constantly a challenge.
  2. Buffett’s comments on “leverage” and “float”. You might be surprised by these comments, as I was.
  3. Buffett’s method of “screening” for new ideas. You might not be surprised to learn that he is not big on “quant” screens…

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