Based on decades of Warren Buffett’s shareholder letters, here are the top lessons that recur throughout his writings:

1. The Power of Long-Term Compounding

Buffett emphasizes thinking in decades rather than months or years, noting that short-term market movements are irrelevant to compounding wealth. He often references Albert Einstein’s statement that “compound interest is the eighth wonder of the world” and urges reinvesting profits rather than seeking immediate returns. He reminds shareholders that “a single winning decision can make a breathtaking difference over time,” reinforcing the belief that a few exceptional investments held over decades can drive monumental value.

2. Value Investing with a Margin of Safety

Key themes include avoiding market speculation, evaluating intrinsic business value, and maintaining a margin of safety. In his 1996 letter, Buffett stated: “Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten, and twenty years from now.”

3. Focus on Quality Businesses with Durable Economic Moats

Over six decades, Buffett has emphasized prioritizing high-quality businesses with durable competitive advantages, as seen in Berkshire’s holdings like Apple, Coca-Cola and American Express. In analyzing 1,000 companies, only 25 met tests of economic excellence with average returns on equity over 20% and no year below 15%. These business “superstars” were also stock market superstars, and most sold non-sexy products in much the same manner as they did years prior, suggesting that making the most of an already strong business franchise produces exceptional returns.

4. Disciplined Capital Allocation

Buffett’s letters highlight the mistakes companies make in capital allocation, such as overpaying for acquisitions or issuing debt irresponsibly. He warns against empire-building by CEOs who make acquisitions for the sake of expansion rather than shareholder value. Buffett wrote in 2016: “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”

5. Integrity and Quality Management

Buffett values integrity highly in business leaders. He famously stated: “In looking for people to hire, you look for three qualities: integrity, intelligence and energy. And if they don’t have the first, the other two will kill you.” When evaluating a company, investors should pay attention to management’s track record, compensation structure and corporate culture.

6. Patience and Avoiding Market Noise

In his 1984 letter, Buffett famously said, “In the short term, the market is a voting machine but in the long term, it is a weighing machine”—a timeless reminder not to get swayed by market hype and to focus on the fundamental value of a business. Buffett reaffirms that short-term noise is irrelevant; compounding wins in the end.

7. Simplicity and Understanding What You Own

Buffett prefers to keep investments simple, especially during complex market periods. During the dotcom boom, he avoided companies he didn’t understand, emphasizing that investors should focus on businesses that are easily understandable. His ability to distill complex financial concepts into understandable, even delightful prose—as if writing as a wise mentor rather than a distant CEO—is reflected in all his communications.