For Warren Buffett, risk isn’t limited to the challenges a business faces today. Instead, he defines it as the potential threats that could erode a company’s strengths years into the future.
Speaking at Berkshire Hathaway’s 2000 annual meeting, Buffett explained: “We think of business risk in terms of what can happen, say 5, 10, 15 years from now, that will destroy, or modify, or reduce the economic strengths that we perceive currently exist in a business.”
He emphasized that Berkshire avoids companies where too many long-term risks are visible: “If we can think of very much that can go wrong with them, we just forget it. We are not in the business of assuming a lot of risk in businesses.”
For Buffett, successful investing isn’t just about spotting strong businesses today—it’s about ensuring their durability for decades to come.
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© 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.