In addition, we will not hesitate to borrow money to take advantage of attractive opportunities.

One of the lessons your management has learned—and, unfortunately, sometimes re-learned—is the importance of being in businesses where tailwinds prevail rather than headwinds.

In line with this owner-orientation, our directors are all major shareholders of Berkshire Hathaway. In the case of at least four of the five, over 50% of family net worth is represented by holdings of Berkshire. We eat our own cooking.

have available the liquid assets with which to consummate such acquisitions, should the hoped-for opportunities present themselves. Present uncertainties such as war, tax rates and decreased level of business activity also all combine to emphasize the continuing need for a strong financial condition.

In this letter we will discuss in some detail the following areas: Operating Conditions — 1966 Survey of Operations 1961-1966 Maintenance of Financial Condition Dividends

We also believe candor benefits us as managers: the CEO who misleads others in public may eventually mislead himself in private.

A managerial “wish list” will not be filled at shareholder expense. We will not diversify by purchasing entire businesses at control prices that ignore long-term economic consequences to our shareholders. We will only do with your money what we would do with our own, weighing fully the values you can obtain by diversifying your own portfolios throu

The fact that the Company is now achieving approximately the same net worth turnover as existed at the beginning of this six-year period is again some indication of the restoration of its strength.

This decrease in outstanding shares has been appropriate, considering the reduction in scale of the Company’s operations due to closing of unprofitable mills.