In a revealing episode, Warren Buffett addresses Berkshire Hathaway shareholders with a candid review of the company's financial performance in 1984, marking a year of substantial, albeit "mediocre," gains. Buffett's letter not only dissects the fiscal outcomes but also delves into the philosophy guiding Berkshire's dividend policy, investment strategies, and the intrinsic value of retained earnings versus distributions. He candidly discusses the challenges and strategic missteps in capital allocation across different business ventures, emphasizing the necessity of investing retained earnings in avenues that promise returns exceeding those available to investors. This episode serves as a masterclass in corporate governance and investment wisdom, providing listeners with an insider's perspective on making prudent, long-term financial decisions in the complex world of business and investment. Join us to unpack the wisdom of one of the greatest investors of our time, as we explore the nuances of Berkshire Hathaway's 1984 shareholder letter.