A:

Warren Buffett normally releases his annual letter to investors toward the end of February or at the beginning of March. The exact date varies from year to year, because he prefers to release the letter on a Saturday. Buffett releases the letter to investors as an accompaniment to the annual report of Berkshire Hathaway, the company he controls as its chairman, president and CEO, with Charlie Munger as vice-chairman.

Buffett has been providing insights to investors in this format annually since 1965. Investors eagerly await the release, as Buffett tends to provide insight into how he sees the broader investment environment, in addition to information on the performance of the business units within Berkshire Hathaway.

Buffett outlined much of his thinking behind the letters in his 1996 booklet “An Owner’s Manual”, in which he highlighted his 13 owner-related principles and explained his approach to business. Among his core principles is to think of shareholders as owner-partners, with himself as a managing partner. In this role he believes that shareholders are entitled to the same sort of reporting that he feels is owed to him by managers of his business units.

As a result, he sees it as important to be candid in reporting to shareholders, emphasizing the positives and negatives that are necessary in appraising market value. In his 1989 letter, there was even a section titled “Mistakes of the First Twenty-Five Years”, where he outlined some of the major investment-related errors that he made in the prior quarter-century. This level of disclosure and candor is not the norm for the majority of publicly-listed companies.

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