| At the top of this year's annual letter, Buffett began with reflections on the many mistakes made at Berkshire Hathaway over the years, but kept his comments general on the advice of the late Tom Murphy: "praise by name, criticize by category."
"Sometimes I've made mistakes in assessing the future economics of a business I've purchased for Berkshire – each a case of capital allocation gone wrong. That happens with both judgments about marketable equities — we view these as partial ownership of businesses — and the 100% acquisitions of companies.
"At other times, I've made mistakes when assessing the abilities or fidelity of the managers Berkshire is hiring. The fidelity disappointments can hurt beyond their financial impact, a pain that can approach that of a failed marriage."
"During the 2019-23 period, I have used the words 'mistake' or 'error' 16 times in my letters to you," Buffett added. "Many other huge companies have never used either word over that span."
Buffett added that, given his advanced age it "won't be long" before Greg Abel takes his place as CEO and writes annual letters to Berkshire shareholders.
"Greg shares the Berkshire creed that a 'report' is what a Berkshire CEO annually owes to owners," Buffett wrote. "And he also understands that if you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well."
In reference to Berkshire's current investments, Buffett also noted some of the "disappointments" that populate that portfolio.
"We own nothing that is a major drag," Buffett wrote, "but we have a number that I should not have purchased."
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