For as long as I’ve been aware of him, Warren Buffett has appeared grandfatherly, dispensing investment wisdom in a straightforward manner. Much of it can be found in his Berkshire Hathaway BRK.A annual shareholder letters, which are available, going back to 1977, on the conglomerate’s website.
Buffett was actually quite young—not yet 26—when he started the first of several investment partnerships in 1956. He’s been writing to investors since the 1950s, and his voice and investment philosophy were evident in his earliest letters. Indeed, much of what he wrote about investing while he was still in his 20s would not appear out of place in a 21st-century shareholder letter.
Buffett will retire as CEO of Berkshire Hathaway at the end of December 2025. Below are some key themes from Buffett’s early partnership letters (many of them are compiled here) on topics that he’s been addressing for close to 70 years.
Read more: How to Invest Like Warren Buffett
1) Markets Are Impossible to Forecast
From his earliest days as an investment manager, Buffett made it clear that he wouldn’t try to predict near-term market performance.
“I make no attempt to forecast the general market—my efforts are devoted to finding undervalued securities. However, I do believe that widespread public belief in the inevitability of profits from investment in stocks will lead to eventual trouble. Should this occur, prices, but not intrinsic values in my opinion, of even undervalued securities can be expected to be substantially affected.”—Feb. 11, 1959
“I am certainly not going to predict what general business or the stock market are going to do in the next year or two since I don’t have the faintest idea. I think you can be quite sure that over the next ten years there are going to be a few years when the general market is plus 20% or 25%, a few when it is minus on the same order, and a majority when it is in between. I haven’t any notion as to the sequence in which these will occur, nor do I think it is of any great importance for the long-term investor.”—Jan. 24, 1962
2) A Long-Term View Is Critical
Even before Buffett had a long-term investment record, he cautioned investors against placing too much emphasis on short-term performance.
“One factor that has caused some reluctance on my part to write semi-annual letters is the fear that partners may begin to think in terms of short-term performance which can be most misleading. My own thinking is much more geared to five year performance, preferably with tests of relative results in both strong and weak markets.”—July 22, 1961
“I have continuously used the Dow-Jones Industrial Average as our measure of par. It is my feeling that three years is a very minimal test of performance, and the best test consists of a period at least that long where the terminal level of the Dow is reasonably close to the initial level.”—Jan. 24, 1962
3) The Market Is Tough to Beat
For more than a decade, Buffett has made the case that, for many investors, an S&P 500 index fund is an ideal vehicle for equity exposure. (In his 2013 shareholder letter, he said his advice to the trustee for his wife’s portfolio would be an asset mix of 10% in short-term government bonds and 90% in a low-cost S&P 500 index fund.)
However, in the early years of his partnership, he used the Dow Jones Industrial Average as his investment benchmark and often wrote about the failure of most of the active mutual funds of the day to match or exceed its performance.
“I do not present the above tabulations and information with the idea of indicting investment companies. My own record of investing such huge sums of money, with restrictions on the degree of activity I might take in companies where we had investments, would be no better, if as good. I present this data to indicate the Dow as an investment competitor is no pushover, and the great bulk of investment funds in the country are going to have difficulty in bettering, or perhaps even matching, its performance.”—Jan. 24, 1962
4) Good Investment Ideas Are Rare
At the end of September 2025, Berkshire Hathaway’s cash balance was more than $380 billion, a dollar amount that exceeds the market capitalization of any other US company, outside of the largest 22 public ones. In part, this is because Berkshire has grown to a size where the opportunities for meaningful investments are few, but it also reflects a general reluctance to make investments at high valuations. Buffett has also long noted how relatively few great investment ideas come along each year.
“The higher the level of the market, the fewer the undervalued securities and I am finding some difficulty in securing an adequate number of attractive investments.”—Feb. 11, 1959
“Most of you know I have been very apprehensive about general stock market levels for several years. To date, this caution has been unnecessary. By previous standards, the present level of ‘blue chip’ security prices contains a substantial speculative component with a corresponding risk of loss. Perhaps other standards of valuation are evolving which will permanently replace the old standard. I don’t think so. I may very well be wrong; however, I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of a ‘New Era’ philosophy where trees really do grow to the sky.”—Feb. 20, 1960
“We now find very few securities that are understandable to me, available in decent size, and which offer the expectation of investment performance meeting our yardstick of ten percentage points per annum superior to the Dow. In the last three years we have come up with only two or three new ideas a year that have had such an expectancy of superior performance. Fortunately, in some cases, we have made the most of them.”—Jan. 25, 1967
“I can’t emphasize too strongly that the quality and quantity of ideas is presently at an all-time low— the product of the factors mentioned in my October 9th, 1967 letter, which have largely been intensified since then.”—Jan. 22, 1969
5) Be Realistic About Your Strengths
One of Buffett’s enduring hallmarks is candid self-awareness about his own abilities, as well as his shortcomings. This trait shows up even in his earliest letters.
“I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of a “New Era” philosophy where trees really do grow to the sky.“—Feb. 20, 1960
“I tried to find some brilliant flash of insight regarding our future or present conditions from my first page and a half annual letter of January, 1957 to insert as a quote here. However, someone evidently doctored my file copy so as to remove the perceptive remarks I must have made.”—Jan. 25, 1967
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