Lessons From Warren Buffett

Lessons From Warren Buffett: Stick to Your Circle of Competence

One of Warren Buffett’s steadfast rules is to invest within what he calls “your circle of competence.” He has adhered to this principle consistently throughout his career, even when it has meant foregoing alluring opportunities.

“Different people understand different businesses,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “And the important thing is to know which ones you do understand and when you’re operating within what I call ‘your circle of competence.’”

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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.