Everyone wants to be like Buffett.

Billionaire Warren Buffett is about to release his latest letter of advice to keen investors. Photo: Nicholas Kamm

Investors around the world hang on Warren Buffett's every word, hoping for a scrap of advice from a legendary businessman. Buffett often dishes out a few morsels of that advice in a letter that coincides with the annual report from his firm, Berkshire Hathaway.

On Monday, Buffett offered an unusually long preview of that advice in an excerpt from his letter, posted on the Fortune website. The full text of Buffett's letter and Berkshire Hathaway's annual report will be released Saturday morning.

Games are won by players who focus on the playing field - not by those whose eyes are glued to the scoreboard 

In the excerpt, the chief executive used two small deals to illustrate several of his core investment principles. In 1986, Buffett bought a 400-acre farm in Nebraska, and in 1993, he invested in a retail property near the New York University campus. The deals, as he tells it, came after farming and real estate bubbles had burst, and in both cases, he knew very little about the day-to-day operations of what he was buying.

But Buffett saw the potential. And while he may not have known about farming or building management, he knew people who did.

Buffett says a son who loved farming gave him a rough idea of the costs and returns. A fellow investor in the New York building was a seasoned buyer of real estate who could help to manage it.

Years later, Buffett says, the farm is worth five times what he paid for it, and the building now throws off annual distributions that exceed 35 per cent of the initial equity investment.

"You don't need to be an expert in order to achieve satisfactory investment returns," Buffett writes. "But if you aren't, you must recognise your limitations and follow a course certain to work reasonably well."

Buffett has built a reputation for zigging when others zag. Last year, his annual letter extolled the virtues of print newspapers, a business other investors cannot seem to get away from fast enough. (Buffett had bought 28 daily papers in a 15-month period.)

He has also long advocated keeping a cool head in a chaotic environment, and he used the farm and real estate purchases to illustrate the importance of a long-term view.

"With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations," Buffett wrote. "Games are won by players who focus on the playing field - not by those whose eyes are glued to the scoreboard."

At least one financial observer, however, took issue with what he saw as an inconsistency in Buffett's advice.

Cullen Roche, the founder of the financial services firm Orcam Financial Group, which says it specialises in macro investment research, wrote in a blog post that while Buffett's annual letters can provide some of the best investing education, they should also be taken with a grain of salt because of their penchant for "vague generalisations."

Roche pointed to a section of the letter that eschews macro forecasting, an outlook that evaluates global economic trends. But later on, Buffett says that "American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts)," which Roche identifies as macro forecasting.

On its website, Orcam describes itself as a "fee only financial services firm specialising in macro investment research and quantitative portfolio construction."

While investors will be looking for nuggets of investment advice when the full letter is released, analysts will be keeping a close eye out for any clues about who will succeed Buffett, 83, as chief executive of one of the country's largest companies.

Buffett has previously disclosed that he had chosen a successor but did not name the candidate.