Throughout history, pivotal moments of insight have often emerged in the most unexpected of places. Just as the ancient Greek mathematician Archimedes famously exclaimed “Eureka!” upon his realization in a bath, so too did Warren Buffett find inspiration while soaking in his tub.
In the depths of the Great Recession in 2011, when investing in banks seemed perilous, Buffett made a bold move. His “Eureka moment” led him to invest $5 billion in Bank of America, a decision that raised eyebrows at the time but ultimately proved to be immensely profitable. Over the years, this investment brought Buffett over $22 billion in returns.
Yet, Buffett himself is quick to downplay the significance of the bathtub in his revelation. Speaking at the 2013 Berkshire Hathaway Annual Meeting, he attributed his moment of clarity not to the water around him, but to the vast reservoir of knowledge he had accumulated over decades. He recalled reading “Biography of a Bank” more than 50 years prior, a book chronicling the history of banking and the likes of A.P. Giannini, the founder of Bank of America. This foundational understanding of the industry, cultivated over half a century, laid the groundwork for his inspired investment.
In essence, both Archimedes and Buffett exemplify the power of preparation meeting opportunity. While the setting may differ, the common thread remains: a deep understanding of their respective fields paved the way for their moments of genius. Whether it’s a bathtub or a boardroom, the lesson endures—the path to enlightenment is often paved with knowledge and experience.
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© 2024 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.