Take Up and Read: The Power of Shareholder Letters

Diving into the archives of the Wall Street Journal can often be unexpectedly rewarding. It’s like stepping into a time capsule. What did investors think in 2010? Were their predictions prophetic or painfully wrong? What did editorials warn against, and did those warnings hold up? In an era where financial news feels disposable, old articles offer a glimpse of how people tried to make sense of markets that, in hindsight, seem obvious.

One such piece from 2016 caught my attention. It tells the story of Geoffrey Abbott, a young fund manager who set out on an almost monastic quest: reading every shareholder letter from the 3,000 largest companies in the U.S. Abbott devoured nearly 40 letters a day for weeks on end. By spring, he expected to arrive at Zynga (now acquired by Take Two Interactive) and Zumiez, having consumed an alphabet of corporate candor (or lack thereof) along the way.

At first glance, his project seems eccentric. Why sift through thousands of annual reports in an age dominated by algorithms and lightning-fast trades? But Abbott was searching for something you can’t find in a spreadsheet: voice, character, and stewardship. The letters, he believed, reveal whether managers think long term, whether they care about shareholders, and whether they can clearly explain how their businesses actually make money.

Warren Buffett, unsurprisingly, applauded the effort. After all, Buffett himself spent the early 1950s reading every page of Moody’s manuals. To this day, he still writes what are arguably the most famous shareholder letters in the world, aiming to tell his sisters exactly what’s going on at Berkshire, without the jargon and without condescension.

For me, Buffett’s example was a turning point. After listening to him stress the importance of reading widely, and especially of studying shareholder letters, I began making it a habit myself. What struck me wasn’t just the information buried in the numbers, but the way a CEO’s tone, priorities, and honesty (or lack thereof) could come through in the prose. It made me realize why Buffett and investors like Abbott value them: they offer a human window into what is often treated as an entirely quantitative exercise.

The sad truth, though, is that most shareholder letters are dismal. Abbott found only 16 out of 1,500 that stood out, a hit rate barely above 1%. Too many CEOs pad their reports with excuses, or trumpet accounting quirks as real triumphs. The best ones, however, did what shareholder letters were meant to do: clarify long-term strategy, admit mistakes, and offer a window into how leaders truly think.

This raises an interesting question for investors today: if so few people bother to read shareholder letters (Notre Dame research cited in the article found only 29 daily downloads per report, on average), is there untapped value in simply paying attention to them? Not as a magic formula, but as a supplement to numbers—a way to understand whether management sees itself as a caretaker or just a short-term promoter.

Buffett put it plainly: as a minority investor, you want to feel like you’re in partnership with someone who shares your wavelength, who values stewardship. Sometimes, you can sense that in the cadence of a letter.

The WSJ article ends on a fitting note, quoting St. Augustine’s conversion story, where a voice urged him to “take up and read.” For long-term investors navigating a noisy, short-term world, that remains righteous advice.

If you’re looking to dive in yourself, a few of my favorite shareholder letters are worth bookmarking. Warren Buffett’s annual letters at Berkshire Hathaway are a masterclass in clarity and candor. For a different flavor, Mark Leonard’s letters at Constellation Software are legendary among thoughtful investors for their bluntness and insight into capital allocation. And for a banker's perspective, Jamie Dimon’s annual letters at JPMorgan Chase consistently stand out for their depth, covering not only the firm but also the broader economy. Each has its own style, but all three remind us why it still pays to read carefully.