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Lessons From Warren Buffett

Lessons From Warren Buffett: Why Speculation Dooms Investors

Excessive speculation has repeatedly led to the downfall of investors and markets. As Warren Buffett explains, it often begins with early investors identifying a genuine, overlooked opportunity. However, as word spreads, the investment loses its connection to fundamentals and turns into pure speculation—inevitably leading to a crash.

At the 2006 Berkshire Hathaway Annual Meeting, Buffett summed it up succinctly: “What the wise man does in the beginning, the fool does in the end.” He pointed out that asset classes initially driven by strong fundamentals eventually attract speculative interest, which can spiral out of control. A classic example is the infamous tulip mania in Holland in the 17th century, where the initial value of tulips was rational but soon became wildly inflated due to speculative frenzy.

This cycle repeats throughout history: early investors profit based on fundamentals, but as greed and envy take hold, speculation dominates, and the bubble bursts. The lesson? Investors must remain cautious and avoid being swept up in speculative manias detached from intrinsic value.

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© 2025 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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Berkshire Hathaway Specialty Insurance

BHSI Launches New Insurance Products in Italy

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) has expanded its offerings in Italy with the introduction of Miscellaneous Professional Indemnity and Public Offering of Securities Insurance. These additions follow the December 2024 launch of BHSI’s proprietary Directors & Officers Liability Insurance in the country.

“Launching our proprietary policy wordings in Italy underscores our commitment to leading both domestic and international insurance programs,” said Marco Vantellino, Head of Executive and Professional at BHSI Italy. “Our approach prioritizes clarity, flexibility, and contract certainty for customers.”

BHSI writes business on a net capacity basis, allowing for tailored coverage and swift local decision-making across underwriting and claims. The company’s service ethos, embodied in its CLAIMS IS OUR PRODUCT philosophy, highlights its focus on delivering excellent claims support.

Leonardo Castrichino, BHSI Italy’s Country Manager, emphasized the company’s growth ambitions: “This launch marks another milestone in our expansion. We aim to continue growing by hiring top talent, launching innovative products, entering new segments, and broadening our presence across Italy.”

The new insurance policies are now available throughout Italy.

© 2025 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.