Berkshire Hathaway Letters to Shareholders, 2016

This is the collected volume of Buffett's annual letters to Berkshire Hathaway shareholders through 2016, running from 1965. The letters are the primary source for his thinking on business analysis, capital allocation, accounting, governance and market behaviour, written annually over five decades with the results visible against the claims.

The recurring analytical content includes: the distinction between businesses that require capital to grow and those that do not, and why the second are worth far more; owner earnings, defined as reported earnings plus depreciation less the capital expenditure required to maintain competitive position, which he argues is the number that matters and which no accounting standard reports; the treatment of float in the insurance businesses as capital supplied by policyholders at negative cost when underwriting is disciplined; the criteria for acquisitions, stated identically for decades; the arguments about goodwill amortisation and about accounting for options and pensions; and the repeated instruction that market volatility is the source of opportunity rather than of risk.

The letters also contain Buffett's admissions of error, which are unusually specific for a chief executive, including the original textile business, Dexter Shoe, and several acquisitions and investments.

The volume is long and repetitive by construction, since the same principles are restated annually. Readers wanting the material organised by topic should use Cunningham's Essays of Warren Buffett, which does exactly that. The letters are published free by Berkshire, so the paid volume's value is only in the binding.

Chairman, Berkshire Hathaway; chief executive 1970-2025; earlier general partner, Buffett Partnership Ltd.

The Berkshire shareholder letters are a primary source in their own right, read and cited far beyond investing.

Berkshire Hathaway, Buffett Partnership Ltd.