Lessons From Warren Buffett

Lessons From Warren Buffett: Most Businesses that Require Huge Capital Investments Make Poor Investments

Warren Buffett warns that most companies that need constant large capital investments usually turn out poorly for investors.

“Most fields that require heavy capital investment, most of the time, they don’t turn out very well over time,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “There are plenty of exceptions to that, but if you find a business that has to keep adding up huge sums of money every year, there always will be a reason why they’re doing it. But the net result, after five or 10 or 20 years usually isn’t very good.”

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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.