You can be on Entrepreneur’s cover!

Warren Buffett's Annual Letter Reveals the Secrets and Lessons Behind $930 Billion Berkshire Hathaway Buffett wrote about the company's unchanging investment rule and how his sister became "very rich."

By Sherin Shibu

Key Takeaways

  • Warren Buffett’s annual shareholder letter is full of reflections on the past year and lessons learned.
  • He wrote about Berkshire Hathaway's investment rule and his confidence in the company.
  • He also shared how his sister, Bertie, became "very rich."
entrepreneur daily

Billionaire Warren Buffett, the 93-year-old chairman and CEO of investment firm Berkshire Hathaway, released his latest annual letter to shareholders on Saturday.

In the letter, Buffett discussed investment strategies, success stories, and lessons learned this past year at Berkshire Hathaway, which hit a record-high $930 billion market capitalization on Monday. He also honored Charlie Munger, who passed away in November at 99 years old, for architecting and helping run Berkshire.

Here are some key takeaways from Buffett's letter, in his own words.

RELATED: Inside the 60-Year Friendship of Warren Buffett and Charlie Munger, Who Both Started Out Working in the Same Grocery Store

What Berkshire Does

"Our goal at Berkshire is simple: We want to own either all or a portion of businesses that enjoy good economics that are fundamental and enduring. Within capitalism, some businesses will flourish for a very long time while others will prove to be sinkholes. It's harder than you would think to predict which will be the winners and losers. And those who tell you they know the answer are usually either self-delusional or snake-oil salesmen."

The Company's Investment Rule

"One investment rule at Berkshire has not and will not change: Never risk permanent loss of capital. Thanks to the American tailwind and the power of compound interest, the arena in which we operate has been – and will be – rewarding if you make a couple of good decisions during a lifetime and avoid serious mistakes.

I believe Berkshire can handle financial disasters of a magnitude beyond any heretofore experienced. This ability is one we will not relinquish. When economic upsets occur, as they will, Berkshire's goal will be to function as an asset to the country – just as it was in a very minor way in 2008-9 – and to help extinguish the financial fire rather than to be among the many companies that, inadvertently or otherwise, ignited the conflagration."

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. Daniel Acker/Bloomberg via Getty Images

Two Long-Term Assets: Coca-Cola and American Express

"During 2023, we did not buy or sell a share of either AMEX or Coke – extending our own Rip Van Winkle slumber that has now lasted well over two decades. Both companies again rewarded our inaction last year by increasing their earnings and dividends. Indeed, our share of AMEX earnings in 2023 considerably exceeded the $1.3 billion cost of our long-ago purchase.

The lesson from Coke and AMEX? When you find a truly wonderful business, stick with it. Patience pays, and one wonderful business can offset the many mediocre decisions that are inevitable."

Railroad Investments

"BNSF is the largest of six major rail systems that blanket North America… Last year BNSF's earnings declined more than I expected, as revenues fell. Though fuel costs also fell, wage increases, promulgated in Washington, were far beyond the country's inflation goals. This differential may recur in future negotiations."

RELATED: Warren Buffett's Squishmallows Is Suing Build-A-Bear for Creating 'Knockoff' Versions of the Plush Toys

Buffett Says Berkshire's Insurance Business Performed 'Exceptionally Well'

"Enough about problems: Our insurance business performed exceptionally well last year, setting records in sales, float and underwriting profits. Property-casualty insurance ("P/C") provides the core of Berkshire's well-being and growth. We have been in the business for 57 years and despite our nearly 5,000-fold increase in volume – from $17 million to $83 billion – we have much room to grow."

A Success Story (About Buffett's Sister, Bertie)

"As a final punctuation point to the 'Omaha Effect,' Bertie – yes that Bertie – spent her early formative years in a middle-class neighborhood in Omaha and, many decades later, emerged as one of the country's great investors.

You may be thinking that she put all of her money in Berkshire and then simply sat on it. But that's not true. After starting a family in 1956, Bertie was active financially for 20 years: holding bonds, putting 1⁄3 of her funds in a publicly-held mutual fund, and trading stocks with some frequency. Her potential remained unnoticed.

Then, in 1980, when 46, and independent of any urgings from her brother, Bertie decided to make her move. Retaining only the mutual fund and Berkshire, she made no new trades during the next 43 years. During that period, she became very rich, even after making large philanthropic gifts (think nine figures).

Millions of American investors could have followed her reasoning which involved only the common sense she had somehow absorbed as a child in Omaha. And, taking no chances, Bertie returns to Omaha every May to be re-energized."

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

This Dad Started a Side Hustle to Save for His Daughter's College Fund — Then It Earned $1 Million and Caught Apple's Attention

In 2015, Greg Kerr, now owner of Alchemy Merch, was working as musician when he noticed a lucrative opportunity.

Business News

I Designed My Dream Home For Free With an AI Architect — Here's How It Works

The AI architect, Vitruvius, created three designs in minutes, complete with floor plans and pictures of the inside and outside of the house.

Marketing

What the C-Suite Needs to Know About the True Power of Earned Media

Through debunking common misconceptions and illustrating its impact across the marketing sales funnel, this article urges C-suite members to embrace earned media as a key driver of sustainable growth and brand influence.

Business News

Disney World, Disneyland Will Now 'Permanently' Ban Guests Who Tell This Lie to Skip Lines

The company rolled out changes to its Disability Access Services earlier this week.

Business News

Adobe's Firefly Image Generator Was Partially Trained on AI Images From Midjourney, Other Rivals

Adobe gave bonus payments to people who contributed to the Adobe Stock database to train its AI, even those who submitted AI-generated images.

Business Ideas

7 Link-Building Tactics You Need to Know to Skyrocket Your Website's Rankings

An essential component of SEO, link building is not just a 'Set them and forget them' proposition, but a dance of skills and strategies.