OMAHA, Neb. -- Warren Buffett is offering a refresher course on his approach to investing in his annual letter to Berkshire Hathaway Inc. shareholders.

Buffett's full letter won't be released until Saturday, but Fortune magazine published an excerpt of it online on Monday.

The billionaire uses two personal real estate investments he made to demonstrate some of his key principles. Buffett bought a Nebraska farm in 1986 and part of a retail property near New York University's campus in 1993. Both purchases were made after prices collapsed.

Buffett says he didn't know much about farming or retail, but he knew enough to determine the farm near Tekamah would remain productive and the retail centre would keep appealing to NYU students.

Buffett says he could tell both investments had little downside.