(May 5, 1997) Buffett and Munger reveal that they're looking for when they evaluate possible acquisitions, how they can make decisions in minutes, and why they work hard to avoid "jerks." They also tell investors not to fear volatility, criticize a big chunk of money managers, and admit they made a mistake when they didn't buy into a sector.
Berkshire scored a 31.8 percent increase in per-share book value in 1996, beating the S&P's 23.0 percent advance. In his annual letter, Buffett called Coca-Cola and Gillette "The Inevitables," predicting they will "dominate their fields worldwide for an investment lifetime." Conceding that many companies in "embryonic" industries will grow faster, he wrote, "I would rather be certain of a good result than hopeful of a great one."READ 1996 LETTER (DATED FEB. 28, 1997)