Pitched Unfairly

The Owners' Letter

Omaha, Nebraska · 2026

Berkshire Hathaway Inc. · Report to owners

A results report, written plainly.

Sixty-one years against one yardstick, with the mistakes left in.

The result, 1965 to 2025

61 years at 19.7% a year. The S&P did 10.5%.

"Otherwise, why do our investors need us?" Owner's Manual, on beating the S&P 500

Berkshire, per-share market value

19.7%

S&P 500, dividends included

10.5%

Overall gain, Berkshire
6,099,294%
Overall gain, S&P 500
46,061%

Results against the yardstick

We beat the index in 40 of 61 years. 2025 was not one.

2025

Berkshire
10.9%
S&P 500
17.9%

Behind by 7.0 points

40 of 61 years ahead so far

What went well, and why

Insurance carried 2025. The weather helped.

2025ResultWhy
Property and casualty combined ratioTen-year average 93.0%. Lower is better. 87.1% EarnedPricing discipline over volume
Hurricanes making U.S. landfallFirst time in a decade. None LuckThe weather, which we do not manage
Insurance floatUp from $171B, and $88B in 2015. $176B EarnedMoney held for future claims, invested meanwhile
Cash from operationsFive-year average a little over $40B. $46B EarnedRailroad, utilities and the rest, without fanfare
Operating earningsDown from $47.4B in 2024. $44.5B DownReported first, not last

Mistakes, owned plainly

Every mistake here is ours. Each one has a price.

How we allocate capital

A dollar we keep must become more than a dollar.

Cash and Treasuries, waiting
$370B+
U.S. income tax paid, 2024, a record
$26.8B
  1. In order of preference
  2. 1

    The businesses we already own

    Reinvest where the returns are good, before anything else.

  3. 2

    Whole businesses we understand

    2025: OxyChem and Bell Laboratories, a rodent-control company.

  4. 3

    Pieces of wonderful ones

    Apple, American Express, Coca-Cola, Moody's, five Japanese trading houses.

  5. 4

    Our own shares

    Only below intrinsic value, conservatively figured.

  6. 5

    A dividend

    When a kept dollar stops beating a paid one. So far: once, in 1967.

What we will and won't do

Written down in 1983. Still the house rules.

"Although our form is corporate, our attitude is partnership."

Owner's Manual, principle 1

We will

  • No. 1Treat you as partners, not a crowd
  • No. 2Keep our own money in it, beside yours
  • No. 3Measure progress per share, not by size
  • No. 12Tell you the bad news as plainly as the good

We won't

  • No. 7Borrow much, for a few extra points
  • No. 8Fill a managers' wish list with your money
  • No. 10Issue shares for less value than we get
  • No. 11Sell a good business, at any price

The people who did it

Praise by name, criticize by category. Here are the names.

  • Ajit JainInsurance, for nearly four decades
  • Katie FarmerBNSF, the railroad
  • Rebecca LiebertLubrizol, and now OxyChem
  • Ted WeschlerInvestments
  • Marc HamburgCFO, handing over to Chuck Chang
  • And nearly 400,000 employees

In memoriam · Forest River

Pete Liegl

Sold his company to Berkshire in 2005 and asked for a salary of

$100,000

because he did not want to out-earn his new boss. He took his upside as a share of the profits he added, and ran the place until he was 80.

Charlie Munger 1924 to 2023. The partner.

The hand-off

After sixty years, the letter has a new author.

  1. 1965Buffett takes control of a New England textile maker
  2. 1983Thirteen owner principles, written down
  3. 1996Mailed to owners as An Owner's Manual
  4. 2021Munger: "Greg will keep the culture."
  5. 2023Charlie Munger dies at 99
  6. May 2025Buffett names Greg Abel to the annual meeting
  7. Nov 2025Buffett says he is "going quiet." Sort of.
  8. Jan 2026Abel becomes CEO; Buffett stays chairman
  9. Feb 2026The first letter by a new author

Memo mode

Write it for two smart readers outside finance.

Buffett drafts each letter to his sisters, Doris and Bertie, then deletes their names at the end.

Dear Doris and Bertie, To the owners:

Our per-share market value rose 10.9% in 2025. The S&P 500, dividends included, rose 17.9%. We lost to our yardstick, as we have in 21 of the last 61 years. Over all 61, we compounded at 19.7% to its 10.5%. Berkshire delivered resilient total shareholder return in a dynamic macro environment, with relative performance reflecting deliberate strategic positioning for long-term value creation.

Operating earnings were $44.5 billion, down from $47.4 billion. Insurance had an excellent year, helped by a hurricane season that never reached our shores. We count the second part as luck. Adjusted operating performance normalized against a strong prior-year comp, as our insurance platform leveraged favorable catastrophe dynamics to drive best-in-class combined ratio outcomes.

We bought two businesses, OxyChem and Bell Laboratories, and still hold more than $370 billion in cash and Treasuries. We will spend it when the price is right, and not before. We executed accretive, synergy-rich M&A while preserving optionality via a fortress balance sheet, positioning us to opportunistically deploy capital across the cycle.

Your partners in OmahaInvestor Relations

What to expect next year

Expect smaller numbers. Expect the same letter.

Owners' day · Omaha · May 2, 2026

  1. Smaller percentagesAt our size, the math of compounding works against us.
  2. Less insurance writtenPrices are softening; we choose discipline over volume.
  3. Buybacks, only cheap onesBelow intrinsic value or not at all. No dividend while a kept dollar does better.
  4. The same letterOnce a year, to everyone at once. No quarterly guidance.