Lessons From Warren Buffett

Lessons From Warren Buffett: In Aggregate, Investment Professionals Don’t Add Value

Warren Buffett is famous for saying that after he dies he wants his wife to put her money into an S&P 500 index fund. Why does Buffett say that? It is because Buffett doesn’t think the financial management field adds value above what investors can do themselves.

“Most professions have value added to them above what the laymen can accomplish themselves. In aggregate, the investment profession does not do that,” Warren Buffett noted at the 2006 Berkshire Hathaway Annual Meeting. “So you have a huge group of people making, I put the estimate as $140 billion a year, that, in aggregate, are, and can only accomplish what somebody can do, you know, in ten minutes a year by themselves.”

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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.

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