Buffett: Performance comes, performance goes. Fees never falter

Posted by Robin Powell on February 26, 2018

Warren Buffett’s latest letter to Berkshire Hathaway shareholders has been published and, once again, it is full of useful insights for ordinary investors.

Here are some of the highlights:


The US economy

“America’s economic soil remains fertile.”


Investing and risk

“Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. ‘Risk’ is the possibility that this objective won’t be attained.”

“Charlie (Munger) and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don’t need.”


The importance of fees

“Performance comes, performance goes. Fees never falter.”


Market declines

“There is simply no telling how far stocks can fall in a short period. Even if your borrowings are small and your positions aren’t immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions.”

“When major declines occur, they offer extraordinary opportunities to those who are not handicapped by debt.”


"Risk' is the possibility that the objective wont be attained'



His winning bet

“Let me emphasise that there was nothing aberrational about stock-market behaviour over the ten-year stretch. If a poll of investment ‘experts’ had been asked late in 2007 for a forecast of long-term common-stock returns, their guesses would have likely averaged close to the 8.5% actually delivered by the S&P 500. Making money in that environment should have been easy. Indeed, Wall Street ‘helpers’ earned staggering sums. While this group prospered, however, many of their investors experienced a lost decade.”

“A final lesson from our bet: stick with big, “easy” decisions and eschew activity. During the ten-year bet, the 200-plus hedge-fund managers that were involved almost certainly made tens of thousands of buy and sell decisions.”


Investor behaviour

“Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta. What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”


Finally, Buffett invokes Rudyard Kipling’s famous poem If to illustrate the personal characteristics successful investors require — calmness under pressure, patience, self-control and self-belief.

“If you can keep your head when all about you are losing theirs …
If you can wait and not be tired by waiting …
If you can think — and not make thoughts your aim…
If you can trust yourself when all men doubt you…
Yours is the Earth and everything that’s in it.”


You can read Buffett’s full letter here:



Related posts:

The Gospel according to Buffett

Buffett: The simple maths that means indexing MUST win

Buffett: Stick with low-cost index funds


Calling evidence-based advice firms

Every day investors are bombarded with information that hinders, rather than helps, them in achieving their financial goals. Regis Media, which produces TEBI, has a wide range of branded content to help advisers explain how investing really works. You’ll find details and prices on our website and a number of explanatory videos on ouYouTube channel.

Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.


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