Wesco Annual Letter To Shareholders 1983

[farnamstreet]

Hard to find, thought you might enjoy.

 

And if serious credit-quality troubles come to the savings and loan industry, they will merely add to troubles from the borrowed-short, lent-long-at-fixed-rates problem, which is far from completely removed, and which destroys shareholder wealth at startling speed whenever interest rates are rising rapidly, even when the credit quality of mortgagors or other borrowers is excellent.

 

http://bit.ly/GAeTC

 

[woodstove]

Thanks - an interesting read.

 

Likely in para 3 under Precision Steel, the phrase "not satisfactory" should be "now satisfactory".

[dual_bid]

Speaking of financial history, here is Wesco's 1990 letter (http://www.docstoc.com/docs/949558/Wesco-Financial-1990-Letter), which was cited in the BRK 1990 letter (with regard to the banking industry). Charlie, as usual, turned out quite prophetic and the whole letter is a very good read if you like financial institutions, but I like the following paragraph the most:

 

"We ... assure Wesco shareholders that this reform-minded section of our letter to shareholders is an unlikely-to-be-repeated aberration. It was caused, in part, by a combination of (1) overwhelming disgust with the present scene, and (2) long association by the writer with an eccentric fellow who may not share all the notions herein expressed but who encourages this kind of writing. This eccentric, who heads Berkshire Hathaway, Wesco`s parent corporation, believes for some reason that accumulated wealth should never be spent on oneself or one`s family, but instead should merely serve, before it is given to charity, as an example of a certain approach to life and as a didactic platform. These uses, plus use in building the platform higher, are considered the only honorable ones not only during life but also after death. Shareholders who continue in such peculiar company are hereby warned by our example in writing this section: some of the eccentricities of this fellow are contagious, at least if association is long continued."