Buffett's advice for investors: Billionaire Warren Buffett, the chair of Berkshire Hathaway, has once again shared his annual letter with shareholders, offering insights from decades of experience in the financial markets.

In his latest missive, Buffett reaffirms his steadfast belief in the power of long-term investing in US equities, tracing back his own investment journey to March 11, 1942, when he made his first foray into stocks. "I can’t remember a period since... that I have not had a majority of my net worth in equities, US-based equities," he writes, highlighting the value of American businesses over the years.

Berkshire's quality focus

Buffett's letter emphasises Berkshire Hathaway's investment philosophy, which prioritises owning businesses with strong and enduring economics. "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," he explains. This focus on quality businesses over short-term market fluctuations has been a cornerstone of Berkshire's success under Buffett's leadership.

Addressing the inevitable market panics and volatility, Buffett remains pragmatic, stressing that while such events may occur unpredictably, investors should stay focused on the long term. "Markets can – and will – unpredictably seize up or even vanish... Such instant panics won’t happen often – but they will happen," he cautions, advising shareholders to maintain a steady course despite occasional turbulence.

Buffett's bold outlook

In assessing Berkshire's prospects, Buffett expresses confidence in the company's ability to outperform the average American corporation while minimising the risk of permanent capital loss. He acknowledges that Berkshire's aspirations are modest, but underscores its focus on delivering consistent returns for shareholders.

One notable investment highlighted in Buffett's letter is Berkshire's stake in Occidental Petroleum, where the conglomerate owns 27.8 per cent of the common shares. Buffett praises Occidental's vast oil and gas holdings in the United States and its leadership in carbon-capture initiatives, signalling Berkshire's optimism about the company's future prospects.

Munger's key influence

Finally, Buffett pays homage to his longtime business partner, Charlie Munger, crediting him for Berkshire's success. Munger's advice to focus on acquiring wonderful businesses at fair prices, rather than seeking bargains, has been instrumental in shaping Berkshire's investment strategy over the years.

Overall, Buffett's annual letter serves as a guide for investors, offering insights into his investment philosophy and timeless principles that have guided Berkshire Hathaway to become one of the world's most successful conglomerates.