One of the most-awaited events in the global financial world is Warren Buffett’s annual letter to Berkshire Hathaway shareholders. Buffett typically provides interesting investment insights and there is much investors can learn from his perceptive thinking. Though his letter is for a largely American audience, there are numerous takeaways for investors around the world. Here are six points from Buffett’s 2016 letter that are relevant in the Indian context.“As is the case in marriage, business acquisitions often deliver surprises after the “I do’s.” I’ve made some dumb purchases, paying far too much for the economic goodwill of companies we acquired. That later led to goodwill writeoffs and to consequent reductions in Berkshire’s book value.”In addition to tangible assets like land, office building, factory, etc. intangible assets like brand, reputation and the like are also considered while valuing a company at the time of acquisition. These intangibles are accounted as goodwill. Existing goodwill is good because the acquirer does not have to allocate additional financial resources to build goodwill. But as Buffett says, it will be foolish to pay a very high price for goodwill. Due to this goodwill impact, companies with good brands usually trade at higher multiples and investors need to be wary. Paying too much, even for a great branded company, might not be a good investment.“Charlie and I have no magic plan to add earnings except to dream big and to be prepared mentally and financially to act fast when opportunities present themselves. Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”Dark clouds cover the Indian economy as well at times. And often, it does rain gold too. For example, Indian markets tanked after demonetisation, but it recovered fast. With people forced to deposit cash into their bank accounts, the banking and financial services sector benefited from this event. Any investor who could have thought about this strategically would have made a windfall from his investments by now.“You need not be an economist to understand how well our system has worked. Just look around. See the 75 million owner-occupied homes, the bountiful farmland, the 260 million vehicles, the hyperproductive factories, the great medical centres, the talent-filled universities, you name it—they all represent a net gain for Americans from the barren lands, primitive structures and meagre output of 1776. Starting from scratch, America has amassed wealth totaling $90 trillion.”According to market research group New World Wealth, total wealth in India stood at $5.2 trillion in July 2016. This made India the 7th richest country in the world. As Buffett says, you don’t need to be an economist to understand this. Just look around and see the construction activities going on, the money being spent in malls, the number of people vacationing abroad or the jobs being created by new companies. And investors should participate in this growth story through the equity route.“The years ahead will occasionally deliver major market declines that will affect virtually all stocks. No one can tell when these traumas will occur. During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted.”This one is a very important insight because the typical Indian investor tends to run away from the markets in a bear phase and reappears with guns blazing in a bull run. This is exactly the opposite of what an investor should be doing. The right time to invest in stocks is when they are available cheap. This is why you should look for purchase opportunities in a downturn.“A number of smart people are involved in running hedge funds. But to a great extent their efforts are self-neutralizing, and their IQ will not overcome the costs they impose on investors. Investors, on average and over time, will do better with a low-cost index fund than with a group of funds of funds.”If both products are similar, go for the low cost one. For example, direct plans of mutual funds are considerably less expensive than regular plans. A lower expense ratio directly translates into higher returns for the investor. Even when insurance products are concerned, the low-cost options like term insurance are better than complicated products like Ulips. Pure insurance policies provide a higher cover for the same premium amount as compared to policies that offer a mix of investment and insurance.“Can you imagine an investment consultant telling clients, year after year, to keep adding to an index fund replicating the S&P 500? That would be career suicide. Large fees flow to these hyper-helpers, however, if they recommend small managerial shifts every year or so. That advice is often delivered in esoteric gibberish that explains why fashionable investment “styles” or current economic trends make the shift appropriate.”Most distributors or agents will tell you to put money into a product that earns them a sizeable commission. This is why, before you take a financial decision, you should be fully aware of the charges and expenses of that product.