VOL. XCIV, NO. 247
BOOK BREAKDOWN
NO ADVICE
Wednesday, January 14, 2026
Intermediate · 2019
The Essays of Warren Buffett
by Warren E. Buffett, Lawrence A. Cunningham · Mostly Evergreen
Buffett's shareholder-letter best hits, organized by topic: how owners should think, how managers should behave, and how capital should be allocated.
Level
Intermediate
Strategies
3 types
Frameworks
6 frameworks
Rating
Target Audience
Ideal Reader
- Investors who want to think like an owner (not a ticker trader)
- Anyone analyzing management quality and capital allocation
- Portfolio managers who need better sell/hold logic grounded in business fundamentals
- Executives/board members who want a shareholder-aligned playbook
- Analysts who want clean frameworks for buybacks, acquisitions, and earnings quality
May Not Suit
- People looking for a stock list or a screening system
- Readers who want a single, fully-specified valuation model (this is principles + judgment)
- Short-term traders
Investor Fit
| Strategy | Value Investing · Behavioral Finance · Portfolio Management |
| Time Horizon | Long-term (5+ years) |
| Asset Focus | Equities · Corporate Governance · Special Situations · Multi-Asset |
| Math Level | Basic to Moderate |
| Prerequisites | Basic accounting literacy (income statement, balance sheet, cash flow) · Comfort thinking in business owner terms |
Key Learnings
- 1Stocks are partial ownership of businesses; start with business quality, not price action
- 2Great investors separate price from value and exploit Mr. Market's mood swings
- 3Capital allocation is a core skill: reinvest, buy back, acquire, or hold cash - each has a test
- 4Buybacks are only good when done at a discount to intrinsic value and without weakening the business
- 5Dividend policy should be judged by opportunity cost and reinvestment returns, not investor preference
- 6Acquisitions destroy value when driven by ego, weak logic, or overpriced stock currency
- 7Reported earnings can mislead; adjusted earnings often hide real economics
- 8Owner earnings (and required reinvestment) matter more than GAAP neatness for valuation
- 9Goodwill is not just an accounting line: economic goodwill is what you want and pay for
- 10Culture, reputation, and incentives are real economic assets (or liabilities)
Frameworks (6)
Formulas (5)
Case Studies (3)
Berkshire Hathaway
Buybacks and when they help vs hurt owners.
Takeaway
Repurchases are only shareholder-friendly at the right price and with the right balance-sheet discipline.
Berkshire Hathaway
Dividend policy as an opportunity-cost decision.
Takeaway
If internal reinvestment returns are high, retaining earnings can beat distributing them.
Goodwill
Why the economic reality matters more than the accounting label.
Takeaway
Great businesses create economic goodwill via durable excess returns; accounting goodwill is just the record of what you paid.
Notable Quotes
“Price is what you pay; value is what you get.”
“Be fearful when others are greedy and greedy only when others are fearful.”
“Our favorite holding period is forever.”
Mental Models
- —Owner orientation: evaluate decisions by per-share intrinsic value impact
- —Mr. Market: volatility is a quote machine, not a truth machine
- —Agency costs: incentives drive behavior (especially in M&A and compensation)
- —Institutional imperative: organizations copy peers and justify dumb decisions with standard practice
- —Circle of competence: you do not need many ideas - just a few you truly understand
- —Reputation as an asset: downside risk includes permanent reputation damage
- —Compounding per-share value: focus on per-share outcomes, not empire-building
Key Terms
No glossary terms documented for this book.
Limitations & Caveats
Keep in mind
- •Not a step-by-step valuation workbook (you still need to learn modeling if you want precision tools)
- •Some accounting/tax discussions are time- and rule-dependent
- •You cannot copy Buffett without his temperament, time horizon, and access to deal flow
- •Easy to turn quotes into slogans and skip the hard work
Reading Guide
Priority Sections
- —Prologue: Owner-Related Business Principles
- —Investing: Mr. Market; debunking standard dogma; value investing
- —Common Stock: Buybacks and Rationality; Dividends and Capital Allocation
- —Acquisitions: Bad Motives and High Prices; Sound Acquisition Policies
- —Valuation: Intrinsic Value vs Book Value vs Market Price; Look-Through Earnings; Owner Earnings
Ratings
Concept Tags
Ready to apply these frameworks?
See concepts from this book applied to real companies with moat scores and segment analysis.
View the moat stocks listLooking for more reading?
Explore our curated collection of investing books organized by level and strategy.
Browse more booksCuration & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.