One of my favorite research pieces to read every year is Warren Buffett’s annual letter to the shareholders of Berkshire Hathaway (BRK-A),his gigantic holding company.

Not only does it paint an excellent broad-brush picture of the US economy, it is also witty, funny, and downright educational, even for old farts such as myself.

Warren and his long time partner Charlie Munger own such a big chunk of the US economy, about 3%, employing a staggering 361,270 individuals world wide, that he has a truly unique 50,000-foot view of what is happening.

For example, his BNSF railroad took it on the nose with the collapse of the US coal industry, but made it back with the rise of rail oil shipments.

Driverless cars promise to have a huge and negative impact on the insurance industry and car dealerships. Traditional print publications continued to be devoured by the Internet. Warren sees it all before anyone else.

Warning: Buffett doesn’t do technology, a sector that he has never understood, and which largely doesn’t pay dividends. Warren is definitely an old economy guy.

He likes to tell his investors that he got the idea to take a 5% stake in Bank of America (BAC) while reading research in the  bathtub. What he DOESN’T tell them is that he was reading MY research in his bathtub.

My followers earned a 400% profit over a single weekend on (BAC) call options on that trade.

Berkshire Hathaway shares suffered an uncommonly difficult year in 2015, shedding some 1.2%, even though the book value per share rose by 6.4%. Over the past 51 years, the shares have rocketed from $19 to $155,501, a 19.2% return compounded annually.

It has been a performance for the ages.

Dad! Where were you?

Buffett starts out by listing his highlights for the year.

He invested $5.8 billion to improve the service of his BNSF railroad, which carries 17% of America’s rail cargo. It was one of the largest single capital investments in US history, and will bring substantially greater profits in years to come.

BNSF, along with Berkshire Hathaway Energy (power utilities), Marmon (manufacturing), Lubrizol (chemicals), and IMC (tools) were his five most profitable investments, seeing profits rise by $650 million to $13.1 billion.

In 2016, they will be joined by a sixth powerhouse, Precision Castparts (aircraft parts), which he picked up recently for a cool $32 billion.

Berkshire’s four largest holdings are in American Express (AXP), Coca-Cola (CCE), IBM (IBM), and Wells Fargo (WFC). In addition, he owns call options which can be exercised into a major position of Bank of America (BAC).

Buffett’s approach here is to take minority stakes in great business with steady earnings streams, rather than 100% ownership in so-so business. He then leaves them alone and lets them work their magic. Cash flow is king.

All of these companies consistently buy back their own shares, increasing the portion of profits paid to Berkshire.

Long time followers of Buffett are well aware of his love affair with the insurance industry. The “float” or the premiums received and held in reserve against future claims, amounts to $87.7 billion and finance the rest of his operations.

GEICO, which Warren has been in and out of several times over the decades, has a gecko that appears to be everywhere.

Despite the rise of global warming, claims from natural disasters are actually falling, which is great for profits.

In the rest of his letter, Buffett delves into the esoterica of industries he owns as diverse as manufactured homes, rail car leasing, furniture, and running shoes.

All in all, it is a tour-de-force of US industry. I highly recommend it.

In fact, it you don’t mind the volatility you might pick up a share of (BRK-A), that is, if you can afford today’s $211,115 price tag.

To read that last 51 years of Buffett’s letters, please click here.