The Juicy Bits from Warren Buffett’s annual letter to Berskhire Hathaway shareholders.

Sometimes letters will bring succor when the numbers fail. Among the losers in the financial disaster of 2008 was Berskhire Hathaway, down 9.6 percent on the year. Though the company still beat the S&P 500 by a healthy 27.4 percentage points, it was only the second annual loss in 44 years for the firm headed by Warren Buffett and Charlie Munger. Buffett was still able to deliver a smile, though, via his annual letter to the company's shareholders. The Big Money has dug up the Juicy Bits, filled with all the Buffett trademarks: earthy analogies, folksy wisdom, self-satisfied grunts, broadsides against the competition, pronouncements on history and public policy, and humble admissions of failure.

Buffett tends to trade in the kind of metaphor you might expect from behind the barn, not near the front of a corporate report, as he shows in the following excerpts.

Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It's not just whom you sleep with, but also whom they are sleeping with.

As we view GEICO's current opportunities, Tony and I feel like two hungry mosquitoes in a nudist camp. Juicy targets are everywhere.

But that's part of Buffett's charm: He spins out aphorisms and warnings that justify his investment philosophy.

As the year progressed, a series of life-threatening problems within many of the world's great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: "In God we trust; all others pay cash."

Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down.

Approval, though, is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier. Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas.

Buffett waxes about his people and profits with both affection and a little affectation.