1

G492

Writing

September 12, 2009

2

(1) Even a draft paper should have a title page with your name, the course number, a date, and your email address.

Finished papers should also have an abstract: a one-paragraph summary of the paper that appears on the title page.

Points of Style

3

(2) Your paper should have every page after the title page numbered (you can number the title page too if you like).

The length should be from 20 to 35 double-spaced pages.

4

(3) It is often useful to divide the paper into short sections usingboldface headings.

5

(4) Indent paragraphs.

You can put blank lines in between paragraphs too if you wish.

6

(5) Don’t use quotations without thinking why.

When should you use quotations?

7

(6) Refer to companies as "it" rather than "they". For example, do not write,

"Worldcom's problem was that they falsified accounting profits.

8

(7) Avoid the words ``to assert'' and ``to state''.

It is fine to write,

“He said that his company would be profitable.”

9

(8) Quotations and citations of specific facts, including those intables, should be given sources.

10

Micro-Level Writing

If you look at your sentences again, you can almost always improve them.

Writing rules are not arbitrary; they are intended to make writing clearer.

11

Strunk and White

The original Strunk book is at

http://www.bartleby.com/141/

12

ELEMENTARY RULES OF USAGE

1. Form the possessive singular of nouns with 's

2. In a series of three or more terms with a single conjunction, use a comma after each term except the last

3. Enclose parenthetic expressions between commas

4. Place a comma before and or but introducing an independent clause

et cetera…

13

Warren Buffett’s Annual Message to Shareholders Even Mr. Buffett's management team

anxiously awaits the boss's letter, which will praise some Berkshire firms and criticize others.

"It's our report card from Warren," says Joseph Brandon, CEO of General Re Corp., a big insurance subsidiary, who postponed his Saturday plans until the afternoon.

"It's the only company in the world where your performance review is a public document."

14

His Method

This year's report began like all the others: handwritten on a yellow legal pad.

His first words are: "Dear Doris and Bertie" -- his sisters. He pretends he is writing a letter to them to keep a homespun tone, to avoid jargon and speak candidly.

Writing at home or on his company's Gulfstream IV jet, he scrawls notes and then passes them to an assistant to be typed and triple-spaced, "so I have room to make changes," he says.

15

This year, he went through dozens of triple-spaced drafts.

He eventually crosses out his sisters' names, substitutes "To the Shareholders of Berkshire Hathaway Inc.," and prints it out.

This version is sent to Carol Loomis, a longtime friend of Mr. Buffett's and editor-at-large at Fortune magazine, who has edited his letters for 25 years -- and has three bracelets made up of enameled copies of annual-report covers to show for it.

16

•

He's his own fact-checker.Last week on a plane ride from Manhattan to

Omaha, he confirmed statistics on the percentage of new homes in the U.S. that are mobile homes (more than 15%), which he included in a paragraph about Berkshire's acquisition last year of mobile-home giant Clayton Homes.

Mr. Buffett also is graphic designer, if you can call it that. His letter has no photographs, changes in font or type size or glitzy graphics.

He makes sure financial tables don't break between pages.

And he cuts "widows," a single word on a line that leaves unused white space.

Attention to Detail

17

On the web, Warren Buffet’s shareholder letters are at:

http://www.berkshirehathaway.com/letters/letters.html

18

Strunk and White Rules

The witness’ truthfulness was obvious, but Jones’ was not.

1. Form the possessive singular of nouns with 's. (but a plural doesn’t add another s)

The witness’s truthfulness was obvious, but Jones’s was not.

19

Production, sales research and development and mergers and acquisitions, were their four main activities.

2. In a series of three or more terms with a single conjunction, use a comma after each term except the last.

Production, sales, research and development, and mergers and acquisitions were their four main activities.

20

Recently, in contrast, one of the world's largest reinsurers-- a company regularly recommended to primary insurers by leading brokers has all but ceased paying claims, including those both valid and due.

3. Enclose parenthetic expressions between commas.

Recently, in contrast, one of the world's largest reinsurers, a company regularly recommended to primary insurers by leading brokers, has all but ceased paying claims, including those both valid and due.

Recently, in contrast, one of the world's largest reinsurers -- a company regularly recommended to primary insurers by leading brokers -- has all but ceased paying claims, including those both valid and due.

21

Berkshire's reinsurance division and GEICO shot the lights out in 2002; and underwriting discipline was restored at General Re.

4. Place a comma before and or but introducing an independent clause.

Berkshire's reinsurance division and GEICO shot the lights out in 2002, and underwriting discipline was restored at General Re.

22

All figures used in this report apply to Berkshire's A shares, the successor to the only stock that the company had outstanding before 1996, the B shares have an economic interest equal to 1/30th that of the A.

•

5. Do not join independent clauses by a comma.

All figures used in this report apply to Berkshire's A shares, the successor to the only stock that the company had outstanding before 1996. The B shares have an economic interest equal to 1/30th that of the A.

23

For last year, when we didn't have any truly major disasters, a downward adjustment is appropriate. If you wish to "normalize" our underwriting result.

6. Do not break sentences in two.

For last year, when we didn't have any truly major disasters, a downward adjustment is appropriate if you wish to "normalize" our underwriting result.

24

Wanting, however, to supplement her family's modest income, food preparation was what she thought about.

• 7. A participial phrase at the beginning of a sentence must refer to the grammatical subject.

Wanting, however, to supplement her family's modest income, she turned to thinking about what she knew best -- food preparation.

25

ELEMENTARY PRINCIPLES OF COMPOSITION

8. Choose a suitable design and hold to it.

9. Make the paragraph the unit of composition: one paragraph to each topic.

10. As a rule, begin each paragraph with a topic sentence; end it in conformity with the beginning.

11. Use the active voice.

Etc.

26

8. Choose a suitable design, and hold to it

A. Overall numbers and philosophy

B. Acquisitions

C. The economics of Insurance

D. How it applies to General Re and Geico

E. Sources of earnings and non-insurance operations

F. Derivative securities and General Re

G. Investments in stocks and junk bonds

H. Thoughts on corporate governance

Etc.

27

9. Make the paragraph the unit of composition: one paragraph to each topic

Our gain in net worth during 2002 was $6.1 billion, which increased the per-share book value of both our Class A and Class B stock by 10.0%. Over the last 38 years (that is, since present management took over) per-share book value has grown from $19 to $41,727, a rate of 22.2% compounded annually.

In all respects 2002 was a banner year. I'll provide details later, but here's a summary:

Our various non-insurance operations performed exceptionally well, despite a sluggish economy. A decade ago Berkshire's annual pre-tax earnings from our non-insurance businesses was $272 million. Now, from our ever-expanding collection of manufacturing, retailing, service and finance businesses, we earn that sum monthly.

28

9A. As a rule, begin each paragraph with a topic sentence; end it in conformity

with the beginning

I have another caveat to mention about last year's results. If you've been a reader of financial reports in recent years, you've seen a flood of "pro-forma" earnings statements -- tabulations in which managers invariably show "earnings" far in excess of those allowed by their auditors. In these presentations, the CEO tells his owners "don't count this, don't count that -- just count what makes earnings fat." Often, a forget-all-this-bad-stuff message is delivered year after year without management so much as blushing.

29

10. Use the active voice

Worse: Another caveat about last year’s results must be mentioned.

Better: I have another caveat to mention about last year's results.

30

11. Put statements in positive form

Worse: Gains from those strategies will certainly not be as big in the next year or two – and may well not be there at all.

Better: Gains from those strategies will certainly diminish within a year or two -- and may well disappear.

31

12. Use definite, specific, concrete language

To begin with, float is money we hold but don't own. In an insurance operation, float arises because premiums are received before losses are paid, an interval that sometimes extends over many years. During that time, the insurer invests the money. This pleasant activity typically carries with it a downside: The premiums that an insurer takes in usually do not cover the losses and expenses it eventually must pay.

32

13. Omit needless words

Worse: We are continuing to be blessed with quite an extraordinary group of managers, many of whom by now do not have even the slightest financial need to work anymore. They do stick around, though, and, in fact, in the past 38 years of our experience, we have never had a single CEO of one of our subsidiaries elect to leave Berkshire to go work somewhere else.

Better: We continue to be blessed with an extraordinary group of managers, many of whom haven't the slightest financial need to work. They stick around, though: In 38 years, we've never had a single CEO of subsidiary elect to leave Berkshire to work elsewhere.

33

14. Avoid a succession of loose sentences

Eddie understood that how he lugged bats was unimportant; what counted instead was hooking up with the cream of those on the playing field. I've learned from Eddie. At Berkshire, I regularly hand bats to many of the heaviest hitters in American business.

34

15. Express co-ordinate ideas in similar form

Dave Sokol, MEHC's CEO, and Greg Abel, his key associate, are huge assets for Berkshire. They are dealmakers, and they are managers. Berkshire stands ready to inject massive amounts of money into MEHC -- and it will be fun to watch how far Dave and Greg can take the business.

35

16. Keep related words together

The table that follows shows (at intervals) the float generated by the various segments of Berkshire's insurance operations since we entered the business 36 years ago upon acquiring National Indemnity Company (whose traditional lines are included in the segment "Other Primary").

36

17. In summaries, keep to one tense

Our 2002 results were hurt by 1) a painful charge at General Re for losses that should have been recorded as costs in earlier years, and 2) a "desirable" charge we incur annually for retroactive insurance (see the next section for more about these items). These costs totaled $1.75 billion, or about 4.6% of float.

Fortunately, our overall underwriting experience on 2002 business was excellent, which allowed us, even after the charges noted, to approach a no-cost result.

37

18. Place the emphatic words of a sentence at the end

In extreme cases, mark-to-model degenerates into what I would call mark-to-myth.

"Except for" losses will forever be part of the insurance business, and they will forever be paid with shareholders' money.

(note the intentional use of the passive voice)

38

The first and second CEOs of Natcom were Smith and Jones respectively.

Natcom’s first and second CEOs were Smith and Jones.

39

We will not tolerate something like embezzlement, that is wrong under all circumstances.

We will not tolerate something like embezzlement that is wrong under all circumstances.

40

Extra words hurt. The effect of them is to reduce clarity.

Extra words reduce clarity.

41

If a strike is short, it’s much less expensive than if its long.

A short strike is much less expensive than a long one.

42

This committee will be made up of nine persons, no more than two of which may be from the finance department.

This committee will have nine members, no more than two of whom may be from the finance department.

43

It was difficult, we had insufficient funds to complete the project on time.

It was difficult. We lacked the funds to complete the project on time.

44

Being in a dilapidated condition, I was able to buy the house very cheap.

Since the house was dilapidated, its price was low.

45

In that year, e. g., 2004, housing was expensive relative to the present.

In that year, i. e., 2004, housing was expensive relative to now.