The Propeller – Yada, Yada, Yada – 3-2-2025

One of my regular annual activities is running to my computer at 8am ET on the last Saturday in February to download Warren Buffett’s latest Berkshire Hathaway Shareholder Letter.

If you’re looking for an incredible amount of financial and life wisdom in a short time, check out this page with links to all the letters going back to 1977: https://www.berkshirehathaway.com/letters/letters.html

His 2013 advice is worth pointing out each year to those of us pursuing Financial Independence:

“My advice to the trustee [trustee of his estate] could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.  I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.”

His 2025 letter was recently released on February 22.  You can read the full letter here:   https://www.coinlive.com/news/buffett-s-2025-letter-to-shareholders-full-text

Here are some key takeaways I got from Warren Buffett’s 2025 annual letter to Berkshire Hathaway shareholders:

Mistakes Happen: Buffett candidly acknowledged that mistakes are part of the investment journey. He emphasized the importance of focusing on the overall “batting average” and highlighted that significant successes can overshadow occasional errors.

Investing in Your Wheelhouse: Berkshire Hathaway continues to prioritize investments in areas it understands well, such as property and casualty insurance. Buffett advised investors to stick to what they know and avoid getting caught up in market noise.  He still recommends Index funds for us everyday investors.

Strong Performance: Despite a record-high cash position, Berkshire Hathaway remains committed to equities. The company reported strong operating earnings, particularly in its insurance business, which saw significant growth.

Leadership Transition: Buffett reiterated his confidence in Greg Abel, his appointed successor, to lead Berkshire Hathaway. Abel is expected to continue the company’s tradition of providing frank annual updates and seizing significant investment opportunities.

Long-Term Investments: Berkshire Hathaway increased its stakes in five Japanese conglomerates, praising their prudent use of capital and fair approach to executive compensation. These investments have proven to be successful, with substantial returns.

Business Lessons: Buffett shared valuable business lessons, including the importance of owning up to mistakes, recognizing the power of a single winning decision, and not judging candidates by their educational background.

These insights from Buffett’s letter provide valuable guidance for investors and highlight the principles that have contributed to Berkshire Hathaway’s long-term success.

Walter Hunt, the ingenious creator behind the safety pin in 1849, devised a timeless design that has stood the test of time. Though it looks almost identical to his original invention, Hunt’s need to settle a $15 debt led him to sell the patent rights for a mere $400 – a fraction of the wealth it eventually generated.

Other companies went on to make millions from his product. Crafted from a single piece of wire with a coiled spring and protective clasp, his design was both simple and effective. Hunt’s inventive spirit extended beyond the safety pin to early sewing machines, repeating rifles, a streetcar bell, and even a precursor to the Winchester rifle. Despite his significant contributions to various industries, he rarely profited from his creations. Yet, his legacy endures, with the safety pin remaining a household staple worldwide. The next time you use one, think of Hunt’s ingenuity.

What can we learn from Hunt’s endeavors as entrepreneurs today? 

Value Your Innovations: Hunt’s story emphasizes the importance of valuing your innovations. Ensure you understand the potential worth of your creations and seek proper legal and financial advice before selling or licensing your patents.

Patenting and Licensing: Protect your intellectual property by filing patents. Consider licensing agreements that allow you to retain some level of control and benefit from future profits.

Market Research: Conduct thorough market research to understand the potential impact and demand for your product. This can help you make informed decisions about pricing and distribution.

Networking and Partnerships: Build a network of industry contacts and consider partnerships that can provide support, funding, and market access, ensuring your innovation reaches its full potential.

Continuous Learning: Stay informed about developments in your field and be open to continuous learning. The business landscape is constantly evolving, and staying updated can help you adapt and thrive.

By taking these steps, modern entrepreneurs can maximize the potential of their innovations and avoid the pitfalls that befell historical inventors like Walter Hunt.

Learn more about Hunt and his inventions here:  
https://www.invent.org/inductees/walter-hunt 

“Success is not final, failure is not fatal: It is the courage to continue that counts.” – Winston Churchill

This quote by Winston Churchill emphasizes that success and failure are both transient states. Achieving success doesn’t mean the journey is over, and facing failure doesn’t mean it’s the end. What truly matters is the courage to persevere, learn, and continue moving forward. It’s a reminder to stay resilient, keep pushing through challenges, and never let temporary setbacks define your long-term goals. This mindset can be especially valuable in the business and entrepreneurial world, where persistence and adaptability are key to sustained success.

Keep this quote in mind as you navigate your week, and let it inspire you to tackle any obstacles with courage and determination!