How to present numbers - Buffet Style


This article from HBR showcases a small trumph of plain language and humanising metaphor over technicals and jargon. I wanted to pass it on.

Every year, the chairs and CEOs of public companies write announcements to accompany their annual reports. Warren Buffet, chairman of Berkshire Hathaway, and the most successful investor of all time wrote one that runs to 20 pages. You'd be forgiven for expecting it to be dry, jargon-riddled technical reading, but it couldn't be further from the truth.

Warren Buffet presents his results and his assessment of the economic climate using conversational (dare I say fun) prose, funny examples and memorable metaphor that make his messages both clear and sticky. This will be great news for his readers - both the Ordinary Joe investor and professionals alike. (Why do people assume that just because someone is 'professional' they all of a sudden thrive on jargon and obscurity?)

His letter includes language like:
"In poker terms, the Treasure and the Fed have gone 'all in'."
(To describe the response to the Global financial crisis),
"Even evaluations covering as long as a decade can be greatly distorted by foolishly high or low prices at the beginning or end of the measurement period. Steve Ballmer, of Microsoft, and Jeff Immelt, of GE, can tell you about that problem, suffering as they do from the nosebleed prices at which their stocks traded when they were handed the managerial baton."
(To discuss different ways they could choose to measure their own performance), and
"We pay a steep price to maintain our premier financial strength. The $20 billion-plus of cashequivalent assets that we customarily hold is earning a pittance at present. But we sleep well."
(To describe their liquidity ratio and justify the opportunity cost.)


HBR sums up four lessons from Warren's shareholder letter:
  1. Use numbers to season the points you serve - they're not the main dish
  2. Use analogies and metaphor
  3. Be honest and transparent
  4. Use facts to put things in realistic context.

The one and a half page HBR article is here.

It's worth the read.



No comments:

Post a Comment

There was an error in this gadget