As a leading South African agency of financial PR and communications strategies for financial services businesses, we believe that Warren Buffett is arguably one of the best communicators in the business.
Buffett – regarded as one of the world’s greatest investors – is the outgoing CEO of Berkshire Hathaway and has delivered a compound annual return of just under 20% since 1965. Viewed differently, Berkshire Hathaway has seen its value rise 5 500 000% over this period of time – unquestionably one of the investing greats over the last 60 years.
With Buffett announcing his retirement at the age of 94, we thought it apt to highlight some of the communication lessons investment professionals can learn from the aptly named “Oracle of Omaha”.
Why South Africa needs a more engaging investor communications landscape:
Before we look at what lessons we can learn from Buffett, it is important to touch on “why” it is important for businesses to proactively invest in their investor communications.
Whether they are seeking to raise capital through listings on bourses such as the JSE or Cape Town Stock Exchange (CTSE) or through Venture Capital channels, South African businesses – particularly those operating in technology or IP-rich environments – have long struggled to secure attractive multiples.
While the JSE has had some interesting developments in its secondary market including some UK listed REITS and the potential arrival of Nasdaq-listed ASP Isotopes, demand for SA equities remains muted. On the Cape Town Stock Exchange (CTSE), new listings and trading volumes are stagnant.
The South African Venture Capital and Private Equity Association (SAVCA) reported that 2024 was a record year for fundraising, but news and deal flow in 2025 seems to suggest that opportunities for investment remain slim.
As highlighted in our recent interview with Warren Wheatley – CEO of Altvest Capital – South African investors have an increasingly diverse range of potential markets to invest in and the competition for capital is fierce.
Are you able to differentiate yourself to attract capital?
This will be very difficult to achieve without having a compelling story to share with investors.
Taking investors beyond the PowerPoint presentation:
Anybody who has followed the Warren Buffett and Berkshire Hathaway stories will be familiar with 2 aspects:
- The annual shareholders meeting in Omaha, Nebraska
- The annual shareholders letter
Both of these have become institutions in the financial calendar and are an example of how an “Owned” media asset can generate hundreds of millions of dollars in positive coverage.
This is in stark contrast to many other businesses who limit their shareholder engagement to a once-a-year engagement with investors in a controlled environment where they deliver a PowerPoint presentation and a handful of questions from the audience.
The annual shareholders meeting:
Listed businesses in South Africa rarely see the value of face-to-face engagements with shareholders, analysts, staff and other stakeholders – even when it comes to results presentations.
The large banking groups have held structured presentations around their interim and annual financial results while businesses like Purple Group and PSG [While the core business was listed] have gone the extra mile with their results presentations typically supported with a social / professional networking day or evening.
The Berkshire annual event takes the concept of shareholder engagement to a new level.
Not only do they host 20 000 shareholders in-person, plus hundreds of thousands join online, Berkshire also allows its portfolio businesses to present to event attendees. As evidenced by the opening remarks from Buffett, these businesses have done roaring trade:
To show you the pulling power of this event, CNBC uploads the full presentation and Q&A – which is over 6 hours in duration – and this attracted more than 660 000 views in the first 24 hours:
You can watch the full presentation here.
The annual shareholder’s letter:
An area where Warren Buffett and the Berkshire team have been so successful is the language they use when talking to stakeholders. Too often leadership teams seek to use corporate or industry jargon in their messaging.
One of the reasons that the annual shareholders letter from Warren Buffett is so popular is that it includes gems like:
- “During the 2019-23 period, I have used the words ‘mistake’ or ‘error’ 16 times in my letters to you. Many other huge companies have never used either word over that span.”
- “I have also been a director of large public companies at which “mistake” or “wrong” were forbidden words at board meetings or analyst calls. That taboo, implying managerial perfection, always made me nervous (though, at times, there could be legal issues that make limited discussion advisable. We live in a very litigious society.
- “Altering my behavior is not an easy task (ask my family). I had enjoyed reasonable success without Charlie’s input, so why should I listen to a lawyer who had never spent a day in business school (when – ahem – I had attended three). But Charlie never tired of repeating his maxims about business and investing to me, and his logic was irrefutable. Consequently, Berkshire has been built to Charlie’s blueprint. My role has been that of general contractor, with the CEOs of Berkshire’s subsidiaries doing the real work as sub-contractors.”
- “If you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well.”
- “Investment bankers, being paid as they are for action, constantly urge acquirers to pay 20% to 50% premiums over market price for publicly-held businesses. The bankers tell the buyer that the premium is justified for “control value” and for the wonderful things that are going to happen once the acquirer’s CEO takes charge. (What acquisition-hungry manager will challenge that assertion?) A few years later, bankers – bearing straight faces – again appear and just as earnestly urge spinning off the earlier acquisition in order to “unlock shareholder value.” Spin-offs, of course, strip the owning company of its purported “control value” without any compensating payment. The bankers explain that the spun-off company will flourish because its management will be more entrepreneurial, having been freed from the smothering bureaucracy of the parent company. (So much for that talented CEO we met earlier.)”
While Buffett has without question earned the ability to be able to speak bluntly, investor communications does feel like it has become overly sanitized and there is a base of investors which enjoys the refreshing, frank commentary from leadership teams about their operating environment and team dynamics.
South African companies can be bolder when it comes to engaging investors:
We were recently approached by an IP-rich biotechnology business which was seeking to raise R20m in venture funding. The business had secured some initial grant funding but was pre-revenue and part of our proposed strategy was a steady stream of media articles to raise its profile amongst venture capital investors.
At the time, we pointed out that a basic desktop Google search showed one article about their business and technology from two years ago and a LinkedIn page which had last been updated 5 months ago. Our view was that this does not create a good first impression. Their counter was that the Venture Capital funding they were seeking to raise was very niche and that they believed the most successful route was to get in front of investment committees with their PowerPoint deck.
The reality is that it takes time to build the narrative your business, your values, ethos and thought leadership positions.
Entrepreneurs behind South African businesses need to be aware that the competition for capital is fierce and investor communications cannot be limited to two updates a year when financial results fall due or a once-off PowerPoint deck.
Compelling story-telling and the development of owned media assets will be a key part of your engagement with stakeholders – invest in them.