To The Moon

As the world anticipates Mr Warren Buffett’s possibly last letter to shareholders to drop on Mon, 10 Nov 2025, it is timely to take a look at why his letters is one of the “must-read” for any investors - institution or retail.

Why ?

Because he shares his knowledge, philosophy, and warm wit, through his annual letters to shareholders of $Berkshire Hathaway(BRK.B)$ — his multi-industry holding company.

These aren’t just letters, they are masterclasses in investing & business, punctuated with Buffett’s humour & humanity.

They encapsulate wisdom & strategies that transcend the boundaries of Berkshire and provide insights that can shape one’s investing journey.

Reading & understanding these letters is about:

• Distilling the wisdom of one of the greatest investors of our time.

• Learning from his successes, understanding his failures, and garnering pearls of wisdom he generously shares.

• Equipping oneself with a compass as one navigate the sometimes tumultuous seas of the financial world.

More importantly, his letters are not just lessons in investing; they’re lessons in life, as well.

They’re about the (a) importance of honesty, (b) value of patience, and (c) rewards of diligence. They’re about making decisions based on understanding & not speculation.

Buffett’s Investment Philosophy.

Very often when we read about posts on Buffett investment strategy, “value investing” is always quoted. Actually there is a part-2 to complete his investment strategy, it is “margin of safety”.

(1) Value Investing.

At the heart of Buffett’s investment philosophy lies the concept of ‘value investing’.

• It is about is about buying quality businesses at a reasonable price and viewing stocks as ownership in solid & lasting enterprises.

• Patience and long-term focus, not short-term frenzy, define the enduring wisdom in Buffett’s approach.

(2) Margin of Safety.

• It is essentially a buffer that investors leverage to protect themselves against (a) errors in estimation or (b) unforeseen market events.

• In other words, it’s the difference between a stock’s intrinsic value and its market price.

Mr Buffett likes to invest in businesses when their market price is significantly lower than their intrinsic value, giving him a substantial ‘margin of safety’.

Key takeaways from his letters (over time).

1984 Letter.

• Mr Buffett stresses the importance of focusing on a company’s long-term economic performance rather than short-term market fluctuations.

• This is the letter where he famously said, “In the short term, the market is a voting machine but in the long term, it is a weighing machine.”

• It means — do not get swayed by market hype. Focus on the fundamental value/s of a business.

1990 Letter:

• It is a masterclass in corporate debt.

• Buffett cautions about the (a) dangers of over-leverage and (b) importance of a strong balance sheet.

• He advises that “Good jockeys will do well on good horses, but not on broken-down nags (old & worn out horses).”

• It is important to invest in companies with strong financial health and good management; not ‘either or’.

2001 Letter:

• It is a sharing on the concept of economic moats — that is, sustainable advantages that protect a company from competition.

• The key to investing is to determine, (a) competitive advantage of any company and (b) durability of that advantage.

• It underscores the importance of looking for companies that can defend their turf in the long run.

Investment Strategy Evolution.

Equally important but often less-mention is Buffett’s personal evolution when it comes to investing in companies based on value investing and margin of safety.

Technology stocks.

• For many years, Buffett avoided investing in technology companies.

• This is because of his preaching on investing in “understandable” businesses (1990 letter).

• However, he has evolved in tandem with the changing business landscape.

• Berkshire substantial investment in $Apple(AAPL)$ demonstrated a recognition and open approach to technology companies.

Shares buybacks.

• Equally, his views on share buybacks evolved too over time.

• In the beginning, he was not a big fan of companies repurchasing their shares.

• In recent times, I supposed he studied, understood and showed appreciation for this practice.

• In his 2020 letter, he stated that well-timed buybacks can be a valuable tool for enhancing shareholder value.

The ability & need to evolve is a testament and demonstrated Buffett’s ability to learn, adapt, and stay relevant in a changing world, something that investors (like us), need to internalize & embrace - critically.

Mr Buffett has also famously said - What counts for most people in investing is not how much they know, but rather how realistically investors define what they don’t know.

His Mistakes.

It would be superficial if we dwell only on Buffett’s successes and ignore mistakes that he has committed.

He has a few in his bags; just that the successful investments more than mitigated the failures.

(1) Airline portfolio.

In 2020, Berkshire Hathaway disposed fully its holdings of airline stocks, that included:

• American airline,

• Delta airline.

• Southwest airline.

• United airline.

Mr Buffett admitted he was wrong about the industry's long-term outlook due to Covid-19 pandemic's impact. Subsequently, he also missed out on the rebound.

(2) $IBM(IBM)$.

Mr Buffett starting investing in IBM between 2011 - 2017, expecting a turnaround that never happened

Later he exited it completely with a nearly -20% loss, realizing the company faced too many strong competitors and had lost its competitive edge.

(3) $ConocoPhillips(COP)$.

COP is the world's largest independent exploration and production (E&P) company, focused on finding and producing oil and natural gas. 

In 2008, Mr Buffett bought into COP, when oil prices were near their peak.

It resulted in multibillion-dollar losses due to "terrible timing" when prices subsequently plummeted.

However, Buffett still hold strong belief in the Energy sector.

Occidental Petroleum.

His recent purchase of $Occidental(OXY)$ is evident of his strong conviction about the energy sector.

Is investment in OXY profitable ?

To answer the “complex” question is to understand that there are 3-parts purchase structure.

Common Stock (OXY Shares):

• Based on recent data (as of Q1 2025), Berkshire's common stock position is estimated to be unprofitable on a cost basis.

• Sources indicate an estimated average purchase price for OXY is around $54 per share, vs stock's recent closing price of $41.31 (as of Fri, 7 Nov 2025).

Preferred Stock:

• This part of the investment is highly profitable and safe.

• Berkshire holds $10 billion in preferred stock from the 2019 Anadarko deal, that pays a guaranteed 8% annual dividend ($800 million annually).  

Warrants:

• Berkshire also holds warrants to buy an additional 83.9 million shares at a strike price of $59.62 per share.

• These warrants would only be profitable when the common stock price rises above that level.

Buffett’s letters remind investors that investing is not a get-rich-quick scheme, but a long-term commitment that requires diligence, patience, and a deep understanding of businesses.

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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• Do you think Mr Greg Abel will continue Buffett’s tradition of writing letters to shareholders ’?

• Do you think BRK.B’s investment in OXY will pay off eventually ?

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