When it comes to investing, Warren Buffett doesn’t believe in guesswork—especially when it comes to financial statements. At the 1995 Berkshire Hathaway Annual Meeting, Buffett cautioned investors against putting money into companies with confusing or unclear accounting.
“I would say that when the accounting confuses you, I would just tend to forget about it as a company,” he said. “We have never had any great investment results from companies whose accounting we regarded as suspect. I can’t think of a one. It’s a very bad sign.”
Buffett’s message is simple: if a company’s financials aren’t transparent, it’s not worth the risk.
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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.