At the 1999 Berkshire Hathaway Annual Meeting, Warren Buffett offered a simple yet powerful definition of investing—and a clear distinction from gambling.
“Investment is the process of putting out money today to get more money back at some point in the future,” he explained. “And the question is, how far in the future, how much money, and what is the appropriate discount rate to take it back to the present day and determine how much you pay?”
Unlike gambling, which relies on chance and short-term outcomes, investing involves evaluating the value of future returns and making informed decisions based on long-term expectations. For Buffett, successful investing means thinking carefully about time, value, and risk—never simply making a bet.
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At the 1999 Berkshire Hathaway Annual Meeting, Warren Buffett offered a simple yet powerful definition of investing—and a clear distinction from gambling.
“Investment is the process of putting out money today to get more money back at some point in the future,” he explained. “And the question is, how far in the future, how much money, and what is the appropriate discount rate to take it back to the present day and determine how much you pay?”
Unlike gambling, which relies on chance and short-term outcomes, investing involves evaluating the value of future returns and making informed decisions based on long-term expectations. For Buffett, successful investing means thinking carefully about time, value, and risk—never simply making a bet.
© 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.