Warren Buffett has long championed simple, long-term investing strategies—and one of the simplest, in his view, is benefiting from share buybacks.
At the 2022 Berkshire Hathaway Annual Meeting, Buffett explained how Berkshire’s stake in American Express grew dramatically over time without the company purchasing more shares. “We owned 150 million shares… and we then owned 11.2% of the American Express Company,” Buffett said. “And now we own 20%.” The reason? American Express has steadily repurchased its own shares, effectively increasing Berkshire’s ownership percentage—without Berkshire spending another dollar.
Buffett likened it to owning a farm that magically expands over time: “Imagine if you had 640 acres and, twenty years later, it had turned into 1,100 or 1,200 acres—without buying more land. That’s essentially what happens when a company buys back its own shares wisely.”
For investors, this means enjoying an ever-larger piece of a growing business, tax-free, and with no effort. Buffett calls it “the easiest investing there is.” His message: when done at the right price, share repurchases are one of the most powerful, yet misunderstood, tools for wealth creation.
Hear Buffett’s full explanation
See the complete Lessons From Warren Buffett series
© 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.