Rama Krishna Sangem
Legendary investor Warren Buffett perhaps may not be giving us his wisdom on how to invest in stock markets. He wrote his last annual letter to Berkshire Hathaway shareholders. He released his final annual letter to the shareholders of the company on Monday, November 10. The CEO of Berkshire Hathaway, set to step down from the top position by the end of this year, announced that he will also take a break from public appearances.
“I will no longer be writing Berkshire’s annual report or talking endlessly at the annual meeting. As the British would say, I’m ‘going quiet’,” the 95-year-old wrote. Buffett’s annual letters have long been considered essential reading for investors. The letters detail Berkshire’s performance, delivers practical business wisdom and also presents Buffett’s thoughts on life and work. His advises on market strategies are popular as Buffettology. NDTV Profit has curated this wisdom into 10 points, here are they:
Buffett wisdom in 10 points:
1 Mistakes Happen In his February 2025 annual letter, Buffett wrote that Berkshire has made mistakes when it comes to the allocation of capital and assessment of managers. As such, it is important to address and correct such errors quickly.
2 Passing through weather storms: In the February 2025 letter, Buffett also highlighted the rising costs of extreme weather events, which drive up insurance payouts. He emphasised the need for proper policy pricing to manage these risks and limit fraud and litigation.
3 Investing In Businesses, Not Just Cash Buffett once highlighted how Berkshire will always be about owning strong businesses instead of holding stacks of cash. Money, he said, tends to lose purchasing power when economies misbehave, but businesses and smart people are much better positioned to navigate financial turmoil.
4 Long-term reinvestment: Buffett often emphasises in his letters that wealth grows through long-term reinvestment. Like a snowball, small gains accumulate over time into substantial growth. Most of his fortune comes from the reinvestment of earnings at Berkshire and in his personal portfolio. The main takeaway here is to invest in strong businesses, be patient, and let time do the work.
Stress on opportunities & values
5 Downturn, an opportunity: Buffett has said in the past that short-term market fluctuations are normal and shouldn’t drive investment decisions. Stock prices often veer away from a company’s intrinsic value but eventually tend to reflect it. He uses the famous “Mr. Market” analogy to show how emotional swings create buying opportunities.
6 Where to put money: One key to Buffett’s success has been smart capital allocation. He has looked for businesses with strong returns, competitive advantages and able management. Berkshire Hathaway invests across public stocks, private companies and subsidiaries, always reinvesting the profits efficiently. Avoiding unnecessary spending or poor acquisitions allows value to compound over time.
7 Leadership with values: Buffett also gives importance to the value of ethical leadership and good corporate governance. He criticises overly generous compensation given to executives and misaligned incentives that favour short-term gains over long-term performance. Integrity, intelligence and energy are core elements of a leader, and honesty is non-negotiable.
8 Avoid greed & grab fear: In his 1986 letter to shareholders, Buffett referred to fear and greed as “super-contagious diseases” in the market. He said the key to successful investing was to act opposite to the crowd. Buffett advised investors to be cautious when others are greedy and reap the benefits of opportunities when others are fearful.
9 Most empires unstable: Many conglomerates chase growth through acquisition with the intention of building empires. According to Buffett’s 2020 letter, most of those empires are inherently unstable. Strong businesses seldom wish to sell out, and weak ones gladly do so but only at inflated prices.
10 Owon businesses, not just stocks: in his 2021 letter, Buffett drove home a key point, which is to buy businesses, not stocks. Focus on firms with durable advantages and an able management, not on short-term market moves or economic forecasts. Successful investors are those who think long-term and evaluate the underlying business, not just the ticker.
Buffett’s final letter, in many ways, marked the end of an era in the American corporate world. However, the lessons in his letters are timeless for both investors and entrepreneurs, says NDTV Profit round-up on Buffett legacy.
