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The Essays of Warren Buffett: The Best Selection from His Annual Shareholder Letters
Key takeaways
- Buffett explains what he looks for in a company: an understandable business, a strong moat, competent management, and a reasonable price.
- Key lessons on corporate governance: how to assess management, why buybacks beat acquisitions at inflated prices.
- Accounting as a tool, not a goal — Buffett explains how to read financial statements and where hidden risks lie.
- The letters are written with humor and without jargon — exceptionally easy to read even for non-professionals.
- The book is available in English; a Czech edition of the Essays exists and is readily available.
If you want to understand how the greatest investor of the twentieth century thinks, you don't need to read dozens of biographies. Simply read what he himself wrote — and Buffett's shareholder letters are the best source for that.
What the Essays of Warren Buffett Are
Lawrence Cunningham compiled a thematic selection from Buffett's annual letters to Berkshire Hathaway shareholders spanning decades. The letters are reorganized into thematic chapters: corporate governance, finance and investing, alternatives to equities, accounting, taxes, and management compensation. The result is a coherent book on investment philosophy, not a chronological listing of letters.
What You Will Learn
Buffett writes about how he evaluates companies — he seeks a simple business with a moat, competent management, and a reasonable price. But the book goes deeper: it explains why acquisitions at inflated prices are destructive for shareholders, how insurance float works as a source of interest-free capital, and why buying back shares at a low price is the best capital allocation.
- Corporate governance: how to identify a good CEO, why shareholders are owners, not spectators.
- Accounting: owner earnings as a better measure of profitability than GAAP net income.
- Diversification: Buffett consciously rejects it for himself — but clearly explains why and for whom the passive approach is better.
Who It Is For and Its Weaknesses
Ideal for anyone who wants to understand value investing in practice — from beginners to advanced investors. The weakness is that the book assumes an interest in picking individual stocks and a US corporate context. For the purely passive investor, some of the corporate governance discussion is less relevant. Even so, it belongs among the best investment books available in Czech. More tips in the book reviews section or in what is an ETF.
FAQ
Is the book available in Czech?
Yes, the Czech edition of The Essays of Warren Buffett is available and easily found in bookstores and online. Cunningham's thematic arrangement is easy to follow even in translation.
How do the Essays differ from Buffett's annual letters?
Cunningham thematically regrouped and compiled the letters — the result is more readable and coherent than reading the letters chronologically. The original letters are freely available on the Berkshire website, but the book provides better structure.
Does Buffett recommend passive investing in the Essays?
Yes, Buffett repeatedly expresses that the best choice for retail investors is a low-cost index fund. That is a powerful recommendation from the man who himself picks stocks with enormous success.
Do I need to understand accounting to follow the book?
A basic familiarity with balance sheets and income statements helps, but Buffett explains everything clearly even for laypeople. The chapters on governance and investment philosophy are fully accessible without accounting knowledge.