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In his 1996 Berkshire Hathaway Annual Letter, Warren Buffett says to be successful at investing, you don’t need to understand complex concepts like beta, efficient markets, modern portfolio theory, option pricing, or emerging markets. Instead, you should focus on two key principles: how to value a business and how to … Read More

In his 1993 Berkshire Hathaway Annual Letter, Warren Buffett explained why an investor’s primary concern should be whether their investment will provide enough purchasing power over time to compensate for the initial investment plus a reasonable return. While this risk cannot be precisely calculated, it can be assessed with a … Read More

During the 2000 Berkshire Hathaway Annual Meeting, Warren Buffett says that he has seen everything in the markets, including companies selling for tens of billions of dollars that are worthless, and companies selling for 20% of their worth. He believes that in markets wild things create their own truth for … Read More

During the 1996 Berkshire Hathaway Annual Meeting, Warren Buffett discourages the strategy of waiting for market panics to buy great companies, comparing it to a mortician waiting for a flu epidemic, suggesting it may not be a reliable investment approach. Here’s an excerpt from the meeting: Buffett: Well I won’t … Read More

During the 1998 Berkshire Hathaway Annual Meeting, Warren Buffett explained why he gave up his “cigar butt” approach to investing. Arguing that businesses with low returns on equity are not good investments, even if they are purchased cheaply, because time is the enemy of the poor business and the friend … Read More

In his 1991 Berkshire Hathaway Annual Letter, Warren Buffett uses the quote, “If at first you do succeed, quit trying.” It’s a tongue-in-cheek way of saying that once you find a great investment, you should hold on to it. This is because great businesses are rare and difficult to find. … Read More

In his 2000 Berkshire Hathaway Annual Letter, Warren Buffett explained why he makes no attempt to pick winners that will emerge from an ocean of unproven enterprises. Here’s an excerpt from the letter: At Berkshire, we make no attempt to pick the few winners that will emerge from an ocean of unproven … Read More

In his 1977 Berkshire Hathaway Annual Letter, Warren Buffett explains why single year snapshots are not adequate portrayals of a business. Investors should focus on the long-term prospects of a company when making investment decisions, rather than getting caught up in short-term trends. Here’s an excerpt from the letter: Just … Read More

During the 1994 Berkshire Hathaway Annual Meeting, Warren Buffett discussed the two yardsticks for judging great management. Here’s an excerpt from the meeting: WARREN BUFFETT: Well, I think you judge management by two yardsticks. One is how well they run the business and I think you can learn a lot … Read More

In his 1986 Berkshire Hathaway Annual Letter, Warren Buffett explained how to use mathematical laws to make better stock market decisions. Here’s an excerpt from the letter: Common stocks, of course, are the most fun. When conditions are right that is, when companies with good economics and good management sell … Read More

In his 2005 Berkshire Hathaway Annual Letter, Warren Buffett discussed the importance of focusing on long-term sustainability and competitive advantage over short-term gains, highlighting the concept of “widening the moat” as a key strategy for business success. Here’s an excerpt from the letter: Every day, in countless ways, the competitive … Read More

In his 1985 Berkshire Hathaway Annual Letter, Warren Buffett discussed the misconception of managerial achievement in companies when it comes to increasing earnings. Saying, that simply increasing capital and earnings without considering the return on capital is not a significant accomplishment. Here’s an excerpt from the letter: When returns on … Read More

In his 1989 Berkshire Hathaway Shareholder Letter, Warren Buffett explained why the rationality of the most decent, intelligent, and experienced managers wilts in the face of the institutional imperative. Here’s an excerpt from the letter: My most surprising discovery: the overwhelming importance in business of an unseen force that we … Read More

In his 1981 Berkshire Hathaway Annual Letter, Warren Buffett used the metaphor of a “gigantic corporate tapeworm” to describe how inflation preempts a portion of a company’s investment dollars, regardless of its profitability. Here’s an excerpt from the letter: What makes sense for the bondholder makes sense for the shareholder. … Read More