(May 4, 1998) Warren Buffett and Charlie Munger criticize American corporations for giving extraordinary compensation packages to average CEOs. They also reveal the secret to success in business, remind investors there's no "degree of difficulty" bonus, and dismiss "due diligence" in deals as a waste of money.
Despite a strong 34.1 percent gain in per-share book value, Berkshire just barely outperformed the S&P's 33.4 percent gain, making the company's performance "no great triumph." In his annual letter, Buffett complained that high prices for stocks and businesses made it hard to find attractive investments. Even though it wouldn't be fun to continuously stand at the plate with his bat on his shoulder, Buffett promised to follow Ted Williams' example and only swing at a "fat pitch."READ 1997 LETTER (DATED FEB. 27, 1998)