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The 1988 letter to Berkshire Hathaway shareholders outlines the company’s financial performance, highlighting a significant increase in net worth despite a more challenging investment climate. Warren Buffett distinguishes between book value and the often higher intrinsic business value, while praising the exceptional returns generated by the "Sainted Seven" operating units. The text addresses complex accounting changes, specifically the transition to consolidated financial statements and new rules regarding deferred tax liabilities. Buffett also details the acquisition of Borsheim’s jewelry store, expressing a strong preference for partner-style management and long-term holding periods for marketable securities like Coca-Cola. Additionally, he critiques efficient market theory by using the firm’s successful history in risk arbitrage as a counterexample. The report concludes by defining the strict criteria for future business acquisitions and welcoming the company's new listing on the New York Stock Exchange.