What Buffett really wants you to remember (2020-24 letters)

This last instalment of our series on Buffett's annual letters shows why sticking to the basics is the best route to investing success. There have been no fireworks in the last five years of Buffett's letters. Just a relentless drilling-in of first principles—so simple, they are almost boring. But ignore them and you risk losing money hand over fist. Here, Buffett does what he has always done best: call out the nonsense (conglomerate illusions, adjusted earnings, overpriced buybacks), double down on the obvious (character, compounding, patience), and remind you that the stock market is not a casino—unless you choose to make it one. These last dispatches will not just inform you on how to invest better. They will also help you think clearer. Let's get into them. The illusion of empire Conglomerates have always had a bit of a God complex. The ambition? Build an empire, one acquisition at a time. But as Buffett laid out in his 2020 letter, most empires are built on sand. The really good businesses are those that don't want to be bought. And the not-so-good ones? They will happily accept a takeover offer as long as you overpay. That, in turn, fuels a game of smoke and mirrors. To make overpriced deals look sensible, many conglomerates rely on an inflated stock price as currency. The result is that promoters push up their own share price through hype and creative accounting, then use that overvalued scrip to gobble u

This article was originally published on May 01, 2025.