The power of shareholder letters.

Writing is thinking.

Writing is clarification.

Writing is action.

And few written documents are more potent than a well-crafted and well-executed shareholder letter.

Lawrence Cunningham has recognized the value of a shareholder letter for years.

Cunningham is an authority on corporate governance, corporate culture, and corporate law and teaches business-related courses at George Washington University that span these fields. 

He has written dozens of books and scores of articles on a wide range of subjects in law and business. 

These include the leading textbook on accounting used in law schools, a popular narrative on contracts, and best-selling books on Berkshire Hathaway and Warren Buffett (The Essays of Warren Buffett: Lessons for Corporate America and Berkshire Beyond Buffett: The Enduring Value of Values).

When individual investors ask what resources to consult when hunting for great companies, Cunningham's advice: read the shareholder letter that the company sends out every year. 

Next to the financial figures, it is probably the most important and most accessible source of valuable information.  

These communications reveal a lot about a company and its CEO.  

The CEO's commitment, desires, goals, and long-term visions are visible in the well-written and purposeful shareholder letter.

Some CEOs use their shareholder letters to obfuscate, patronize, and many appear ghostwritten, but the best share business insights that help readers understand a company.

Use these clues as filters, just as you would the company's financial statements. 

Many companies post such letters on their websites, usually part of the annual report.

The gold standard of the genre is Warren Buffett, whose pithy statement from his 1997 letter to shareholders of Berkshire Hathaway sums it up:

"When you receive a communication from us, it will come from the fellow you are paying to run the business. Your Chairman has a firm belief that owners are entitled to hear directly from the CEO as to what is going on and how [he/she] evaluates the business, currently and prospectively. You would demand that in a private company; you should expect no less in a public company."

In Dear Shareholder, Cunningham's latest book holds letters from more than 20 leaders from 16 companies - several of my favorite companies, including Amazon, Google, Coca-Cola, and Pepsi.

This book is a powerful go-to for inspiration and creativity.

Written to be consumed more like an encyclopedia, you can quickly jump to topics, companies, and leaders.

Cunningham's collection of the best-in-class shareholder letters provides valuable insights - be it better company management or how to communicate better.

If you need help with your writing to ensure it is inspiring and creative, Caracal is here to help.

Enjoy the ride + plan accordingly.

-Marc

Why economic diplomacy starts in DC | Example 1

The National Governors Association had a reception last night at German Ambassador Emily Haber’s residence, where German Chancellor Olaf Scholz sent in a recorded video message. Spotted per Politico: New Jersey Gov. Phil Murphy, North Carolina Gov. Roy Cooper, Colorado Gov. Jared Polis, Illinois Gov. J.B. Pritzker, Puerto Rico Gov. Pedro Pierluisi, Alabama Gov. Kay Ivey, Hawaii Gov. Josh Green, Connecticut Gov. Ned Lamont, New York Gov. Kathy Hochul, Louisiana Gov. John Bel Edwards, South Carolina Gov. Henry McMaster, Utah Gov. Spencer Cox, Delaware Gov. John Carney, Nichole Francis Reynolds,Sherman Greer, EU Ambassador Stavros Lambrinidis, Swiss Ambassador Jacques Pitteloud, Ukrainian Ambassador Oksana Markarova, and Elias Alcantara.

With more than 175 embassies, ambassador residences, international cultural centers, and multilateral organizations like the World Bank and the Organization of American States, Washington, DC, is one of the most globally interconnected cities in the world. DC already has a strong tradition of Lobby Days on Capitol Hill; Caracal believes the time is now for Advocacy Days on Embassy Row.

If you need help with your economic diplomacy, Caracal is here to help.

Sound More Interesting at Cocktails Memo | February 10, 2023

25 talking points for better conversation at cocktails from news of the past week.

1. Nearly 100 countries and hundreds of NGOs have provided medical aid to Turkey.

2. Ukrainian President Volodymyr Zelenskyy is one of the few world leaders who have made an address from Westminster Hall over the past 30 years, including Nelson Mandela, Barack Obama, and, more recently, King Charles III.

3. The Biden administration believes the People's Liberation Army balloon effort has spied on "more than 40 countries across five continents."

4. "Near space has become a new battleground in modern warfare," an article in the Liberation Army Daily, the official newspaper of China's military, said in 2018.

5. British media reported in June that over 10 Russian generals had been killed in the Ukraine conflict. Japanese intelligence estimates the total at more than 20.

6. In early March, 10,000 Norwegian and allied soldiers will train to defend Norway in the winter exercise Joint Viking.

7. Ethiopia is Africa's second most populous country.

8. New Zealand finds 3.5 tons of cocaine floating in the Pacific: The cache, estimated to be worth $315 million, is large enough to supply the Australian market for a year and New Zealand's for three decades.

9. 27.3 million: The number of viewers who watched President Biden's State of the Union address on TV — the second smallest SOTU audience in at least 30 years.

10. China accounts for more than 70% of the world's lithium-processing capacity.

11. A typical 60 kilowatt-hour EV battery might hold 160 pounds of graphite compared to 20 pounds of lithium.

12. How much graphite was mined in the US last year? The US has not mined since the 1950s.

13. Just one million EVs, assuming a 60-kilowatt-hour battery in each vehicle, will require almost 80,000 tons of graphite.

14. Japan targets $1,500 for spending by foreign visitors with more extended stays and sustainable tourism to attract the affluent.

15. Google today controls 91% of the search engine market.

16. The collegiest town in America: Alfred, NY, where students make up an astonishing 85% of the town's population of 4,500.

17. Twitter Blue subscribers can now send tweets up to 4,000 characters.

18. AMC, the movie theater chain, plans to add dynamic seat pricing.

19. Conductor Gustavo Dudamel is leaving the Los Angeles Philharmonic for the New York Philharmonic starting in 2026.

20. You can sleep in your vehicle in nearly every major ski area in Oregon and Washington.

21. The CBC is looking to end its broadcasts on traditional TV and radio in favor of a digital-only strategy.

22. Austin is the fastest-growing major metro area in America, having expanded by a third in the past ten years.

23. Beyoncé has now won more Grammys than any other artist in history.

24. Getting workers back to the office just reached a key milestone: 50 percent are back at their desks on average, the most since the pandemic hit in March 2020.

25. The decision on who will host World Cup 2030 will happen in 2024, with the bidding process set to open officially later this year.

Enjoy the ride + plan accordingly.

-Marc

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