Berkshire Hathaway Meets Taylor Swift
Trying to get home on a Thursday to see a little grownup
Dear Fellow Expat:
Amelia turns seven years old today.
She was thrilled to share birthday brownies with her classmates.
Seven years go by in a blink. So do the dance parties, the questions, the Taylor Swift songs, more questions, new experiences, new questions, and all the things that are good in the world.
I look forward to leaving the hospital today and sharing one simple annual gift with her: One B share of Berkshire Hathaway (BRK.B) stock.
She doesn’t yet entirely "get" the stock market. So I'm writing today's Postcards issue for her, translating why Warren Buffett’s company is such an incredible long-term investment with a few comparisons to her favorite musician, Taylor Swift.
So here goes, to Amelia...
Happy 7th Birthday, Fearless Girl!
Do you know how Taylor Swift doesn't just sing one type of song?
She's written pop songs like "Shake It Off," country songs like "Love Story," and quiet songs like "Cardigan."
Well, the special birthday present you're getting – a share of Berkshire Hathaway B stock – is a little like Taylor's album collection. Berkshire owns pieces of so many different companies:
GEICO – with the funny gecko commercials
Dairy Queen – where we sometimes go to get ice cream treats
See's Candies – you love chocolates
Burlington Northern – big trains that carry things across the country
Duracell – the batteries in your toys
And so many more.
It's like having a collection of all different types of toys instead of just dolls or blocks.
But that's not the only thing that makes Berkshire so unique.
Owning "Uncle Warren's" company is like having a magical piggy bank that grows over time.
Berkshire Is a Magical Piggy Bank
Remember how insurance helps pay for repairs when something breaks, like when we had the guest room fixed after the hurricane in Florida?
Berkshire owns big insurance companies.
When people give them money to keep safe (called insurance), they can use it to buy more good companies while waiting to see if any problems happen. They use this money (called float) to buy great companies and make more money.
It's like having a magical piggy bank that helps buy more piggy banks.
Berkshire isn't in a hurry to spend its money. Instead, it considers what will make people happy for many, many years.
Just like Taylor takes her time to write songs, Berkshire takes time to make perfect investment decisions. The results have been incredible.
Since I was about your age, Berkshire's market cap has increased from around $1 billion to $1 trillion this year. They were the first non-tech company to do that, just like Taylor was the first artist to make more than $1 billion from music.
Berkshire is also good at knowing exactly where to put their money to help it grow.
Sometimes, just like you wait for the perfect moment to wear your favorite sparkly dress, they wait for the perfect moment to buy new companies. When all the stars align for them.
If they can't find the perfect company to buy, they just wait patiently – just like waiting for Taylor's next album.
They Let People Be Their Best
Do you know how your teacher lets you and your friends work on projects your own way?
Berkshire does the same thing.
When they buy a company, they don't try to change everything.
They let the people who know the company best keep running it.
It's like how Taylor Swift gets to write her own songs instead of having someone tell her what to write.
And when other companies have problems or need help, Berkshire can use their savings to help them or buy them. It's like being the friend who always has an extra snack to share at lunch.
That's a reason why everyone trusts them.
When people hear "Berkshire Hathaway," they know it's a good company that tells the truth and keeps its promises. During the financial crisis before you were born, everyone reached out to Warren Buffett to ask for help. They knew they could trust them.
It's like everyone knows Taylor Swift works hard and puts on amazing shows – they trust her to do her best. Companies like knowing Berkshire will take good care of them.
They Know How to Change With the Times
Even though Berkshire is an old company, they know how to keep up with new things.
They own part of Apple now.
The other night, you asked if I had an Apple phone (the brand that we discussed), and the iPhone (the product). We went a few rounds on this one.
It's like how Taylor started with country music but learned to make all different kinds of songs as times changed.
Berkshire also ensures that smart people will always be there to manage the company, even when the current leaders are gone. It's like a good teacher making sure someone will feed the class fish even when they're not at school.
The most amazing thing about your Berkshire stock is that it grows slowly but surely over time – just like you're growing.
It didn't happen overnight, but with patience and smart choices, it became something incredible.
Every year, your shares of Berkshire will hopefully grow a little bigger. And maybe someday, when you're older, you'll look back at this gift and understand just how special it is – like how Taylor looks back at her first guitar.
In the song "Long Story Short," Taylor writes, "Past me, I wanna tell you not to get lost in these petty things. Your nemeses will defeat themselves before you get the chance to swing."
You’ll see a similar message about how Buffett behaves.
Berkshire doesn't worry about small problems or what other companies are doing.
They just keep focusing on doing things the right way, year after year.
I know you’ve learned to do the same.
Happy Birthday, Amelia.
You're a part-owner of some fantastic companies. For anyone interested in investing in Berkshire stock for under $20, read this piece from last week.
Love,
Dad
Aka… Garrett Baldwin
Secretary of Analogies
P.S. Pathology came back: No infection and no cancer. They don’t know what this is yet. It's probably something I got on a Brazilian farm 10 years ago. We’ll see.