Tag: Value Investing

Warren Buffett, the legendary investor, understands that stock market prices often disconnect from underlying fundamentals. This creates both risks and opportunities for disciplined investors.

At the 1997 Berkshire Hathaway Annual Meeting, Buffett warned about the dangers of speculative enthusiasm. “People get captivated simply by the notion of rising prices without going back to the underlying rationale. That’s when you get very dangerous conditions in terms of possible bubbles,” he explained.

Buffett emphasized that this behavior isn’t limited to market highs. Extreme reactions—whether euphoric or fearful—can lead to mispriced assets. “It’s just people behave in extreme ways in markets,” he noted. “And over time, that’s very good for people that keep their heads.”

For Buffett, staying rational amid market volatility is key to long-term success.

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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.

New businesses are constantly emerging as entrepreneurs launch new ventures in various industries. However, legendary investor Warren Buffett emphasizes the importance of investing in businesses with high barriers to entry—factors that deter competitors from flooding the market.

At the 2012 Berkshire Hathaway Annual Meeting, Buffett explained that industries without significant barriers to entry face intense competition. “In those industries, you better be running very fast,” he said, noting that competitors will quickly analyze and exploit weaknesses or strive to outperform existing players.

For long-term success, Buffett seeks businesses that are protected by factors like brand loyalty, patents, or operational advantages, shielding them from being overwhelmed by new entrants. His advice highlights the value of competitive resilience in sustaining business growth.

Hear Buffett’s full explanation

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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.

Amid debates about growth versus value stocks, Warren Buffett emphasizes that growth itself is a form of value. Using GEICO as an example, he explains that projected growth can enhance a company’s assets and, in the case of insurers, its float—provided the growth is predictable.

Speaking at the 2012 Berkshire Hathaway Annual Meeting, Buffett highlighted GEICO’s potential: “I think it’s quite rational to assume a significant underwriting profit at GEICO over the next decade or two, and I think it’s likely that it will have significant growth. Both of those are items of enormous value.”

By adding projected growth to the current float value, Buffett underscores how future expansion can contribute meaningfully to a company’s overall valuation.

Hear Buffett’s full explanation

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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.

Warren Buffett acknowledges that stock market prices can sometimes drift far from their underlying fundamentals. For him, these moments present both risks and opportunities.

“People get captivated simply by the notion of rising prices without going back to the underlying rationale,” Buffett said during the 1997 Berkshire Hathaway Annual Meeting. “That’s when you get very dangerous conditions in terms of possible bubbles.”

This disconnect isn’t limited to price surges. According to Buffett, market extremes occur both in booms and busts, driven by emotional reactions. “People behave in extreme ways in markets,” he observed. “And over time, that’s very good for people that keep their heads.”

Buffett’s advice? Stay grounded, focus on fundamentals, and take advantage of market misjudgments when others lose perspective.

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.

New businesses emerge constantly, reflecting the dynamic nature of the entrepreneurial world. However, for long-term investors like Warren Buffett, the focus is on businesses with high barriers to entry—features that protect them from being overwhelmed by competition.

At the 2012 Berkshire Hathaway Annual Meeting, Buffett emphasized the importance of these barriers. “There are some industries that are just never going to have barriers to entry,” he noted. “In those industries, you better be running very fast because there are a lot of other people…looking at what you’re doing and trying to figure out…what they can do a little bit better.”

In industries with low barriers, businesses must innovate and adapt quickly to stay ahead, making them less appealing for long-term investment. Buffett’s advice underscores the importance of choosing enterprises that are shielded from relentless competition.

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.

In a world where markets often promote constant activity, Warren Buffett stands out for his legendary patience. How long is he willing to wait for the right investment opportunity? As long as it takes.

Speaking at the 1998 Berkshire Hathaway Annual Meeting, Buffett explained his approach: “We wait indefinitely. We are not going to buy anything just to buy something. We will only buy something if we think we’re getting something attractive.”

For Buffett, patience isn’t passive—it’s strategic. “If the money piles up, the money piles up,” he said. “When we see something that makes sense, we’re willing to act very fast, very big. But we’re not willing to act on anything that doesn’t check out in our view.”

Buffett’s philosophy highlights the value of discipline in investing. “You don’t get paid for activity,” he noted. “You only get paid for being right.”

For investors, it’s a timeless lesson: patience often leads to better decisions and greater rewards.

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.

Is there a hidden formula for stock market success reserved for a select few? According to Warren Buffett, the answer is a resounding no. The legendary investor insists that the tools for success are readily available to anyone willing to put in the effort.

Buffett often points to Benjamin Graham’s classic book The Intelligent Investor as a prime example of accessible wisdom. His advice? “Read everything in sight.” At the 2005 Berkshire Hathaway Annual Meeting, Buffett dismissed the idea of insider knowledge, saying, “There are no secrets in this business that only the priesthood knows.”

He emphasized that investing is straightforward, with all the necessary information “out there in black and white.” For Buffett, the key lies in education and diligence—not exclusivity.

Hear Buffett’s full explanation

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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.

The financial world is filled with constant noise—from Federal Reserve actions to trade developments and IMF forecasts. Yet, Warren Buffett, the legendary investor, pays no attention to headlines when making investment decisions.

“There’s always going to be good and bad news out there,” Buffett observed. Speaking at the 2012 Berkshire Hathaway Annual Meeting, he emphasized the importance of value over news cycles: “We look to value, and we don’t look to headlines at all. If we find a business that we think we understand, and we like the price at which it’s being offered, we buy it. And it doesn’t make any difference what the headlines are.”

For Buffett, short-term market chatter is irrelevant. His approach centers on understanding a business, evaluating its intrinsic value, and making decisions independent of external noise—a timeless lesson for investors.

See Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 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.

Warren Buffett, the legendary investor, has long cautioned against two common investment pitfalls: misunderstanding one’s investment and using borrowed money to leverage it. Combining these mistakes, he warns, often leads to disastrous outcomes.

“Any time you combine ignorance and borrowed money, you can get some pretty interesting consequences,” Buffett remarked during the 1994 Berkshire Hathaway Annual Meeting. He highlighted the historical risks of excessive borrowing, noting that “the ability to borrow enormous amounts of money combined with a chance to get either very rich or very poor very quickly has historically been a recipe for trouble at some point.”

Buffett’s advice serves as a timeless reminder for investors to thoroughly understand their investments and approach leverage with extreme caution.

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 BYD, 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.