Warren Buffett has a simple yet powerful message for investors: the complexity of an investing strategy doesn’t guarantee greater rewards. Speaking at the 1998 Berkshire Hathaway Annual Meeting, Buffett contrasted investing with Olympic diving.
“In Olympic diving, they have a degree of difficulty factor,” Buffett explained. “But that’s not true in investments. You get paid just as well for a simple dive, as long as you execute it correctly.”
Buffett emphasized the importance of execution over complexity, highlighting that investors can achieve success by focusing on straightforward strategies. He used the analogy of stepping over one-foot bars rather than attempting to clear seven or eight-foot bars for Olympic glory.
“It’s very nice, because you get paid just as well for the one-foot bars,” Buffett remarked.
Buffett’s words serve as a reminder that in the world of investing, simplicity and sound execution often yield the best results. Instead of chasing complex strategies, investors can find success by mastering the basics and staying disciplined in their approach.
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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.