2004

Click here to read the letter.

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🧠 Key Takeaways

• Investing isn’t done by looking in the rear-view mirror where the road is clear. It’s done by looking through the windshield, where the view is foggy and visibility is low.

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✍️ Memorable Quotes

“Clearly, Berkshire’s results would have been far better if I had caught this swing of the pendulum. That may seem easy to do when one looks through an always-clean rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged.”

It’s easy to tell someone they should’ve invested in NVDA when it’s already up 1,300%. When you already know the outcome, everything looks obvious.

But that’s not how investing works in real time. When decisions are actually being made, you’re looking through the windshield into an unknowable future.

You don’t know how your investment decisions are going to play out, or how long it’ll take for things to unfold. You’re simply making the best decision you can with an incomplete view of what lies ahead.

That’s really what Buffett is getting at here. Investing isn’t done by looking in the rear-view mirror where the road is clear. It’s done by looking through the windshield, where the view is foggy and visibility is low.

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