With thousands of public companies each producing dense annual reports, it can be overwhelming for investors to know where to begin. Warren Buffett offers a timeless, straightforward approach: start with companies you understand—and ignore the rest.
Speaking at Berkshire Hathaway’s 1998 Annual Meeting, Buffett emphasized that annual reports can provide all the information you need to make an investment decision. “We start by looking at the reports of companies that we think we can understand,” he said. Buffett explained that a well-written report should tell readers what they’d want to know if they owned the whole business.
He pointed to Coca-Cola as a prime example. “The Coca-Cola annual report over the last good many years is an enormously informative document,” Buffett noted. “We bought that stock based on an annual report. We did not buy it based on any conversation of any kind with the top management of Coca-Cola before we bought our interest.”
For Buffett, the clarity and transparency of an annual report—combined with a solid understanding of the business—can be all it takes to make a multi-billion-dollar investment.
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© 2025 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.