Along the way, Buffett shares with his stockholders great insight into the reasoning behind every acquisition and major investment made and provides a highly detailed historical account of Berkshire Hathaway’s growth. And while Berkshire Hathaway is now a publicly traded company with a market cap over $330 billion — and Class A shares worth $222,850 per share — 50 years ago, Buffett was worried about getting too big. These are his actual letters — word for word — a “lesson plan” of his views on business and investing. This book compiles the full, un-edited versions of 50 years of Warren Buffett’s letters to the shareholders of Berkshire Hathaway.

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On October 2, 2014, Berkshire Hathaway Automotive, an auto dealership subsidiary, was created through the acquisition of Van Tuyl Group, the largest auto dealer in the nation that was berkshire hathaway letters to shareholders still independently owned up to that date. In March 2011, Berkshire Hathaway made its first foray into the Indian insurance sector with its non-direct subsidiary BerkshireInsurance.com. In September 2011, Berkshire Hathaway acquired Lubrizol for $9 billion in cash. In February 2010, the remaining portion that it did not already own was acquired for $26 billion.

In his 1983 letter, Buffett makes exactly this point, saying, “Were we to split the stock or take other actions focusing on stock price rather than business value, we would attract an entering class of buyers inferior to the exiting class of sellers.” Buffett desires shareholders who intend to hold Berkshire stock for the long term, and lowering the price of Berkshire stock to make it more tradable would inherently bring in a more trigger-happy brand of owner who is more than happy to jump in and out of Berkshire stock as he/she pleases. “We will try to avoid policies that attract buyers with a short-term focus on our stock price and try to follow policies that attract informed long-term investors focusing on business values.” (1983) In his 1983 letter, he states his distaste for highly active investing, saying, “One of the ironies of the stock market is the emphasis on activity. In fact, if their business experience continues to satisfy us, we welcome lower market prices for stocks we own as an opportunity to acquire even more of a good thing at a competitive price.”

• Goldman had the right to re-purchase the preferred stock at a 10% premium, and in March 2011 exercised this right paying $5.5 billion to Berkshire.
• When discussing his purchase of stock in the Washington Post in his 1993 letter, Buffett states that “the academics’ definition of risk is far off the mark, so much so that it produces absurdities.
• A flag for the historic county of Berkshire was registered with the Flag Institute in 2017.
• In the first quarter of 2016, Berkshire began investing in Apple Inc., with a purchase of 9.8 million shares (0.2% of Apple) worth $1 billion.
• The overall return of Berkshire Hathaway’s stock from 1965 to 2021.
• Buffett has described buying the Berkshire Hathaway textile company as the biggest investment mistake he had ever made, denying him compounded investment returns of about $200 billion over the subsequent 45 years.

He openly states that for investments in truly great companies, his favorite holding period is forever. Buffett humorously (but accurately) describes his investment style in his 1990 letter, when he says that “lethargy bordering on sloth remains the cornerstone of our investment style.” With regard to his policy of concentrating his holdings, Buffett states that he feels that his risk is actually reduced by investing in companies with which he is familiar and fairly certain of their long term prospects. The answers to these three questions will allow the investor to rank all of his possible investments in different “bushes.” According to Buffett, “Aesop’s investment axiom, thus expanded and converted into dollars, is immutable. Early on, readers see that Buffett is very candid in his communication with his shareholders and that he does not shy away from discussing both his triumphs and failures. Thus, Buffett and Munger do not view Berkshire to be the owner of the assets, but as a “conduit through which shareholders own the assets.”

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Thus, volatility actually works in favor of the intelligent investor because increased volatility creates increased opportunity to take advantage of even lower lows and higher highs. The investor can always use Mr. Market to his advantage as long as he understands that Mr. Market’s purpose is to serve him rather than to guide him. Berkshire has averaged a book value growth rate of 19.7% compounded annually from $19 per share in 1965 to $114,214 per share in 2012. Each letter typically begins with the change in book value over the course of the year. Berkshire’s goal is to keep the companies operating exactly as they were before the purchase.

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In Compton, a small village, roughly 10 miles from Newbury, a chemical manufacturing company called Carbosynth was founded, in 2006. Newbury is home to the world headquarters of the mobile network operator Vodafone, which is the town’s largest employer with over 6,000 people. The European head offices of major IT companies BlackBerry, CA Technologies, are in the town. The financial company ING Direct has its headquarters in Reading, as does the directories company Hibu.

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In June 2017, Berkshire invested $377 million in Store Capital, a Scottsdale-based real estate investment trust that owned more than 1,750 properties in 48 states; the company was sold to private equity firms in 2022. In April 2020, Berkshire sold all shares in the airlines due to the impact of the COVID-19 pandemic on commercial air transport. While Buffett generally does not invest in tech stocks, he has said that Apple is a consumer products company and that he understands consumer products businesses. Aggressive stock purchases continued and by March 31, 2017, Berkshire had amassed a stake of 129 million shares (2.5% of Apple).

It’s a compilation of every letter Warren Buffett wrote to the shareholders of Berkshire Hathaway. Readers gain a framework for how to view risk, markets, and investing, as well as an understanding of how truly great businesses should operate. Indeed, these letters can at times provide a window into the mind of a man who is widely considered to be the greatest investor of all time. Under the right circumstances, there is very little that a manager can do to benefit his/her shareholders more than repurchasing undervalued shares. Buffett only contemplates issuing additional shares of stock as part of an acquisition (and even in this instance, only grudgingly). Conversely, if a manager cannot create over $1 of market value for every $1 retained, he has a duty to his shareholders to distribute his earnings to them so that they may earn a higher rate of return elsewhere.

Berkshire Hathaway reduced its Apple stake by nearly 50%, selling $75.5 billion worth of stock in the second quarter of 2024, increasing its cash reserves to a record $276.9 billion. By 2017, this position had yielded a profit of about $12 billion excluding the annual interest earned from the preferred stock. In October 2008, Berkshire invested $6.5 billion in Wrigley Company as part of a financing package to enable Mars Inc. to acquire the company. In September 2008, BHE invested about US$230 million for approximately a 10% share of BYD Auto.

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In his view, many times the company being purchased will sell for full intrinsic value anyway, so the purchasing company must be sure to pay with an equal amount of intrinsic value on its end. In this event, the key question to Buffett is whether he can receive as much intrinsic business value as he gives. Managers should structure their dividend policy so that they retain only the earnings that can be reinvested at a high enough rate of return to create over $1 of market value and distribute the remaining earnings as dividends. He goes on to state that, as opposed to Adam Smith’s “invisible hand,” hyperactive markets act like an “invisible foot,” tripping up and slowing down a progressing economy. But investors should understand that what is good for the croupier is not good for the customer. Just insert the correct numbers, and you can rank the attractiveness of all possible uses of capital throughout the universe.” Both of these criteria are of vital importance to Buffett’s investment decision-making, but regrettably he does not go into a great deal of detail on either subject.

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In the first quarter of 2016, Berkshire began investing in Apple Inc., with a purchase of 9.8 million shares (0.2% of Apple) worth $1 billion. In 2013, Berkshire owned 1.74 million shares of Gannett; however, it sold its shares in the second quarter of 2013. Some shares were sold in 2023 and 2024, with Buffett motivated by the China–United States trade war.

In 2012, National Indemnity acquired workers’ compensation insurer GUARD for $221 million. In 1963, Franklin Otis Booth Jr. invested $1 million in the company (equivalent to $10,300,000 in 2024), and in 1968 David Gottesman also invested in the company. As of the end of 2024, the company had only 27 employees at that corporate headquarters. However, this left Buffett’s fund with a major interest in a declining textile business.

Above all, readers see the “Oracle of Omaha” at work each year, shaping an investing career that may not ever be replicated. A combination of traits is required, including an understanding of true risk and market fluctuations. In fact, being a major, long-term shareholder is one of the primary qualities that Buffett takes into account when searching for directors. If a functional board is in place, and it is dealing with “mediocre or worse” management, it has a responsibility to the absentee shareholder to change that management.

In 2017, Berkshire was the largest shareholder in United Airlines and Delta Air Lines and a top 3 shareholder in Southwest Airlines and American Airlines. Buffett had made an investment in US Airways in 1989 which, although he sold for a profit, almost lost Berkshire a substantial sum of money. In the third quarter of 2016, Berkshire surprised investors by making large equity investments in the major US airlines. By December 31, 2017, Berkshire owned 166 million shares (3.3% of Apple). By the end of June 2016, this stake had increased to 15.2 million shares (0.3% of Apple). The shares yielded 6%, earning Berkshire $300 million in annual interest.

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• Buffett defended Lloyd Blankfein’s decisions as CEO of Goldman Sachs and his efforts to improve the reputation of the company during the 2008 financial crisis.
• When Mr. Market offers high prices, the investor can take advantage by selling to him at a price above intrinsic value, and when he offers low prices, the investor can take advantage by buying from him at prices below intrinsic value.
• Early on, readers see that Buffett is very candid in his communication with his shareholders and that he does not shy away from discussing both his triumphs and failures.
• Buffett himself has described this as a “call on the industry” rather than a choice in an individual company.

In October 1999, Berkshire acquired Jordan’s Furniture for an estimated $200 million to $300 million. In addition to brokerage services, it provides mortgage loan originations, title insurance and closing services, home warranty, property insurance and casualty insurance and other related services. The division owns a residential real estate brokerage business, which, in March 2013, was rebranded as HomeServices of America, a division of Berkshire Hathaway Energy. In December 1998, Berkshire acquired Gen Re, headquartered in Stamford, Connecticut, for $22 billion.

By viewing market prices as quotes from a manic-depressive business partner, the investor is now put in a position of power over market prices rather than enslaved by them (a far-too-common occurrence). Occasionally, Buffett will choose to include special topics in his letters on whatever topic he feels that his shareholders should be aware. These forty-eight letters do not provide a magic formula for valuing companies or maximizing profit in the market. Through Warren Buffett’s annual letters to his shareholders, his readers follow Berkshire’s journey from struggling textile mill to diversified juggernaut with a great amount of detail.