4 Important Lessons from the Latest Annual Report of Warren Buffett’s Conglomerate

Every year, the Oracle of Omaha, Warren Buffett, releases his firm’s annual report. In it, readers can find a treasure trove of information. This year was no exception. So, let’s take a look at four important lessons I gleaned from the 2016 Annual Report published at the end of last month.

1. On American businesses and their futurehead here.

2. Do not fear stock market downturnshead here.

3. On share repurchases, head here.

Always praise your employees

Warren Buffett is well-known for praising those working under him, sometimes even at the expense of himself! Lavishing praise on his employees shows what a great individual he is and how much he appreciates the hard work put in by those under him.

In his latest annual report, he showered compliments on Ajit Jain, who manages the reinsurance arm of his company. Buffett said:

“Ajit insures risks that no one else has the desire or the capital to take on. His operation combines capacity, speed, decisiveness and, most important, brains in a manner unique in the insurance business.”

Buffett added (emphasis is mine):

When Ajit entered Berkshire’s office on a Saturday in 1986, he did not have a day’s experience in the insurance business. Nevertheless, Mike Goldberg, then our manager of insurance, handed him the keys to our small and struggling reinsurance business.

With that move, Mike achieved sainthood: Since then, Ajit has created tens of billions of value for Berkshire shareholders. If there were ever to be another Ajit and you could swap me for him, don’t hesitate. Make the trade!

Even though Buffett is the second richest man on Earth, he has displayed humbleness in downplaying himself and complimenting Jain. In looking for companies to invest in, we should also look out for managers who celebrate their employees.

For more (free!) insights from the world of investing, sign up here for your FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead.

Like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.