Category: Lessons From Warren Buffett

Whether it is something as futuristic as the metaverse, or something as mundane as ride-sharing, Warren Buffett is quick to point out that just because an industry is on the cutting-edge, and will be transformational to the world, doesn’t mean it will be a good investment. As Buffett famously said “If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money.”

“There’s a lot of difference between making money and spotting a wonderful industry. You know, the two most important industries in the first half of this century in the United States, in the world, probably were the auto industry and the airplane industry,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “Here you had these two discoveries, both in the first decade, essentially in the first decade of the century. And if you’d foreseen, in 1905 or thereabouts, what the auto would do to the world, let alone this country, or what the airplane would do, you might have thought that it was a great way to get rich. But very, very few people got rich by being, by riding the back of that auto industry. And probably even fewer got rich by participating in the airline industry over that time.”

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© 2023 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.

Warren Buffett offers a unique perspective on crafting a meaningful existence. His advice, though unconventional, is a profound invitation to introspection and deliberate living. He suggests that to determine how one wants to live, it is wise to start with the end in mind and reverse engineer the desired outcome.

“You should write your obituary and then try and figure out how to live up to it,” Buffett said at the 2023 Berkshire Hathaway annual meeting. This unconventional approach to personal introspection challenges us to consider our own mortality, prompting us to reflect on the legacy we wish to leave behind.

By visualizing the narrative of our lives through the lens of an obituary, we gain clarity about our core values, priorities, and aspirations. It compels us to ask ourselves: How do we want to be remembered? What contributions do we want to make to the world? What impact do we desire to have on our loved ones and society at large?

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© 2023 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.

With so many people trading stocks every day, it might seem wise to look to a longer time horizon than just trying to make money overnight. What is a long term time frame? Warren Buffett points out that even three to five years, a seeming eternity to some trade-happy investors, is not really sufficient to give you the safety you hope to gain as a long term investor.

“If your time frame is three to five years, A.) I wouldn’t advise it being that way, because I think if you think you’re going to get out then, it gets more toward, leaning toward the bigger fool theory,” Buffett said at the 1998 Berkshire Hathaway annual meeting. “The best way to look at any investment is how will I feel if I own it forever? You know, and put all my family’s net worth in it.”

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© 2022 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.

Warren Buffett, known for his baseball analogies, compares investing to a batter waiting for the right pitch. Unlike the batter, investors face no called strikes and can patiently seek the perfect opportunity. However, it’s important not to let the pursuit of perfection hinder the recognition of good investments. While aiming for home runs, one must also appreciate the value of solid opportunities. Striking a balance between waiting for ideal prospects and seizing worthwhile investments is the key to long-term success.

“One of the things, one of the errors people make in business, and sometimes it can be a huge error, is that they try and measure every deal against the best deal they’ve ever made,” Buffet said 2011 Berkshire Hathaway Annual Meeting. “The goal is not to make a better deal than you’ve ever made before. The goal is to make a satisfactory deal that’s the best deal you can make at the time.”

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© 2023 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.

Warren Buffett is renowned for his brilliant investment decisions, but even he admits that some of his early ones were not so great. In particular, he acknowledges that his initial purchase of Berkshire Hathaway was a costly mistake, resulting in a missed opportunity worth $200 billion. Although the company was ailing in the textile industry, he thought it was a cheap opportunity to acquire assets below their book value. However, he later realized that the money required to keep it afloat would have been better spent on acquiring a high-quality business instead.

“Start from a good base,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “Don’t follow our example in that respect. Start out with a good business and then keep adding on good businesses.”

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© 2023 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.

With a seasoned wisdom born out of decades of astute observation and thoughtful analysis, Warren Buffett urges investors to eschew the siren call of capricious sentiments that too often cloud judgment and lead to grave missteps. For in the delicate dance of financial markets, where fortunes are won and lost amidst the ebb and flow of economic tides, it is the rational mind, steadfast and unswayed by the tempestuous winds of emotion, that emerges victorious.

“We make bad investment decisions plenty of times. I make more than Charlie. I like to think it’s because I make more decisions, but probably my batting average is worse. But, I can’t recall any time in the history of Berkshire that we made an emotional decision,” Buffett said at the 2023 Berkshire Hathaway annual meeting. “You don’t want to be a no emotion person in all of your life, but you definitely want to be a no emotion person in making an investment or business decision.”

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© 2023 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.

In the grip of speculative fervor, as even money-losing enterprises witness their stocks soar skyward, it becomes all too easy to disregard the fundamental truth that enduring triumph in the realm of investments hinges on a company’s profits, not the capricious dance of its price.

“The only money investors are going to make, in the long run, are what the businesses make,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “I mean, there is nothing added. The government doesn’t throw in anything. You know, nobody’s adding to the pot. People are taking out from the pot, in terms of frictional cost, investment management fees, brokerage commissions and all of that.”

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© 2023 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.

Warren Buffett’s approach to acquiring companies involves relying on his own research and analysis rather than depending on the opinion of investment bankers. He believes that investment bankers may not always provide trustworthy advice, as they may be incentivized to prioritize their own interests over those of the acquiring company.

“The idea of asking investment bankers or somebody to evaluate the businesses you’re going to buy, I mean, that strikes us as idiocy,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “If you don’t know enough about a business to decide whether to buy it yourself, you’d better forget it. It does not make sense. You bring in somebody who’s going to get a very large check if you buy it, and a very small check if you don’t, that displays a faith in human nature that would strain Charlie and me.”

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© 2023 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.

Warren Buffett is resolute in his stance that he would never swap his Berkshire Hathaway shares for gold or any other commodity. He emphasizes that the notion of trading a productive asset for a non-productive one is entirely unfamiliar to him.

“I can’t imagine ever exchanging any of my shares for gold coins,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “I would rather trust in the intrinsic value of a bunch of really fine businesses run by good managers selling products that people like to buy and have liked to buy for a long time, and then exchanging their future efforts, the money that comes from their wages, for See’s Candy or Coca-Cola or whatever, than take some piece of metal that people dig out of the ground in South Africa and then put back in the ground at Fort Knox, you know, after transporting it and insuring it and everything else.”

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© 2023 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.

It is easy for investors to get itchy trigger fingers. After all, they are investors and investing is about putting your money to work. However, Warren Buffett has no problem with waiting until he finds the value and price that he wants.

“The question of how long we wait, we wait indefinitely. We are not going to buy anything just to buy something,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “We will only buy something if we think we’re getting something attractive.”

Hear Buffett’s full explanation

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© 2023 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.