There are few things more valuable for serious investors to read each year than Warren Buffett's annual letter to the shareholders of Berkshire Hathaway.

His letter for 2016, released early Saturday morning, is no exception. In it, Buffett covers his usual range of subjects, from the performance of Berkshire Hathaway and its operating units, to the future prospects of the United States, to advice for corporate executives and individual investors.

The whole letter is worth reading - it is, after all, less than 30 pages long. But for those of you who want to view the highlight reel, Motley Fool journalist John Maxfield offers his 5 favorite takeaways from Buffett's latest shareholder letter. [Click link below to read Mr. Maxfield’s complete take away.]

1. ON MARKET PANICS.    A growing number of high-profile investors and institutions have begun to issue warning signs that stocks are approaching unsustainable levels, following the market's surge in the wake of the presidential election.

Buffett both buys this line of thinking and doesn't. While the market is certain to experience major declines, it's impossible to predict when they'll occur, he notes in this year's letter. At the same time, Buffett urges investors to look at these as opportunities to - as he's said in the past - be fearful when others are greedy.

During such scary periods, you should never forget 2 things: (i) widespread fear is your friend as an investor, because it serves up bargain purchases; (ii) personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively financed American businesses will almost certainly do well.

2. ON SHARE BUYBACKS.    In theory, there's nothing wrong with this, as stock buybacks are just another avenue for companies to return capital to shareholders. Done at the right price, moreover, they add value to existing shareholders' stakes. But in practice, as Buffett notes in this year's letter, companies tend to ignore this nuance, preferring instead to repurchase stock irrespective of price:

3. ON COMPETITIVE ADVANTAGE.    A company with a competitive advantage over others in its industry can continuously grow its market share while simultaneously earning superior returns. And no competitive advantage is stronger than efficiency. A company that operates at a lower cost base than its competitors has the world at its fingertips, so to speak. It can underprice other companies in its industry, capturing many of their customers, and still generate wider margins and thus higher profitability. GEICO is a perfect illustration of such a company.

4. ON ACCOUNTING RED FLAGS.    Buffett prides himself on being a straight shooter. He calls things how he sees them and doesn't try to inflate the performance of Berkshire Hathaway through accounting adjustments that exclude temporary, but nevertheless real, costs, as so many companies do nowadays when reporting "adjusted earnings." The 86-year-old billionaire has taken issue with this practice in the past, and he does so again in this year's letter:

Too many managements - and the number seems to grow every year - are looking for any means to report, and indeed feature, "adjusted earnings" that are higher than their company's GAAP earnings. There are many ways for practitioners to perform this legerdemain. Two of their favorites are the omission of "restructuring costs" and "stock-based compensation" as expenses.

Charlie and I cringe when we hear analysts talk admiringly about managements who always "make the numbers." In truth, business is too unpredictable for the numbers always to be met. Inevitably, surprises occur. When they do, a CEO whose focus is centered on Wall Street will be tempted to make up the numbers.

5. ON HOLDING PERIODS.    If you scan the list of Berkshire Hathaway's major stock holdings on Page 19 of Buffett's latest letter, there's a glaring absence: Wal-Mart. Mr. Buffett says that comments of shareholders or media imply that we will own certain stocks "forever." It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we're talking 20/20 vision). But we have made no commitment that Berkshire will hold any of its marketable securities forever.

[Click here for ... Berkshire Hathaway 2016 Annual Letter to Shareholders.]