Tag: Value Investing

One of the most formative books Warren Buffett read as a young investor was The Intelligent Investor by Benjamin Graham. Buffett has praised it as “by far the best book on investing ever written.”

A key concept from the book is the character of “Mr. Market,” Graham’s metaphor for the stock market’s often irrational behavior. Sometimes, Mr. Market offers fair prices for stocks—but other times, his emotions swing wildly, quoting values that are “a little short of silly.”

Buffett echoed this idea at Berkshire Hathaway’s 2012 Annual Meeting, saying, “It’s a marvelous game. The rules are stacked in your favor, if you don’t turn those rules upside down and start behaving like the drunken psychotic instead of the guy that’s there to take advantage of it.”

For Buffett, the lesson is clear: success in investing often comes down to staying rational while others are ruled by fear or greed.

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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 is a firm believer that successful investing doesn’t require predicting the stock market’s next move. In fact, he openly admits he has no idea what the market will do in the short term. “We haven’t the faintest idea what the stock market is going to do when it opens on Monday,” he once said.

Speaking at Berkshire Hathaway’s 2022 Annual Meeting, Buffett reflected on how he missed opportunities during the COVID-19 market crash in March 2020. “We have not been good at timing,” he acknowledged. “We’ve been reasonably good at figuring out when we were getting enough for our money.”

For Buffett, the key isn’t timing—it’s value. He focuses on buying stocks when they’re undervalued and holding them for the long term. “That’s stuff you can learn in fourth grade,” he said. “But it’s not what’s taught in school.”

His approach is simple but powerful: don’t try to guess the market. Instead, look for businesses you understand, assess their true worth, and buy when the price is right.

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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.

With thousands of public companies each producing dense annual reports, it can be overwhelming for investors to know where to begin. Warren Buffett offers a timeless, straightforward approach: start with companies you understand—and ignore the rest.

Speaking at Berkshire Hathaway’s 1998 Annual Meeting, Buffett emphasized that annual reports can provide all the information you need to make an investment decision. “We start by looking at the reports of companies that we think we can understand,” he said. Buffett explained that a well-written report should tell readers what they’d want to know if they owned the whole business.

He pointed to Coca-Cola as a prime example. “The Coca-Cola annual report over the last good many years is an enormously informative document,” Buffett noted. “We bought that stock based on an annual report. We did not buy it based on any conversation of any kind with the top management of Coca-Cola before we bought our interest.”

For Buffett, the clarity and transparency of an annual report—combined with a solid understanding of the business—can be all it takes to make a multi-billion-dollar investment.

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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.

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When it comes to building wealth, timing matters — and according to Warren Buffett, the best time to start saving is as early as possible.

At the 1998 Berkshire Hathaway Annual Meeting, Buffett emphasized the power of saving before life’s bigger financial responsibilities kick in. “Any money you save before you get out and start having a family … any dollar is probably worth $10 later on simply because you can save it,” he said.

Buffett’s point is simple but powerful: saving when you’re young — especially before starting a family — gives your money more time to grow through compound interest. Once family life begins, expenses inevitably rise, making it harder to set money aside.

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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.

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At Berkshire Hathaway’s 2025 annual meeting, Warren Buffett shared a rare insight into his investment approach, highlighting the importance he places on balance sheets over income statements.

Buffett revealed that he spends more time analyzing a company’s balance sheet than its income statement, noting that Wall Street tends to overlook this financial document. He explained that studying balance sheets over an 8 to 10-year period provides a clearer picture of a company’s financial health and stability. According to Buffett, it’s harder to hide or manipulate figures on a balance sheet compared to an income statement.

While acknowledging that neither financial statement offers the full picture, Buffett emphasized the value in understanding not only what the numbers reveal, but also what they omit, and how they may be influenced by management or auditors. He believes that balance sheets offer deeper insights than most investors realize, making them a critical tool for long-term analysis and informed decision-making.

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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.

Famed investor Phil Fisher, author of Common Stocks and Uncommon Profits, believed that successful investing requires much more than analyzing financial reports. He emphasized the importance of “scuttlebutt” — gathering informal information from people connected to a company, such as competitors, customers, and employees.

Warren Buffett strongly agrees. At the 1998 Berkshire Hathaway Annual Meeting, he said, “I followed [Fisher’s] scuttlebutt method.” Buffett explained that while reading is essential, nothing beats firsthand research: talking directly to those who interact with the business every day.

Buffett’s advice highlights a key investing lesson — real-world insights can offer an edge that numbers alone often miss.

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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 Efficient Market Theory suggests that a stock’s price always reflects all available information about a company, making it impossible to consistently outperform the market. However, Warren Buffett firmly disagrees.

Speaking at the 2012 Berkshire Hathaway Annual Meeting, Buffett stated, “It’s built into the system that stocks get mispriced.” He explained that while Berkshire Hathaway’s stock has historically fluctuated less than many other large companies, it still moves away from its intrinsic value over time. Buffett predicted that over the next 20 years, Berkshire — along with companies like Coca-Cola, Wells Fargo, and IBM — would sometimes be significantly overvalued and at other times significantly undervalued. He emphasized that while the timing and sequence are unpredictable, mispricing is inevitable.

Buffett’s view highlights a fundamental belief: markets are not always perfectly efficient — and opportunities for careful investors still exist.

Buffett’s full explanation on mispriced stocks

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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.

Trying to recover losses by pouring more money into a struggling stock is a common mistake—and one that Warren Buffett warns against.

At the 1995 Berkshire Hathaway Annual Meeting, Buffett emphasized a key investing principle: “You don’t have to make it back the way you lost it. And in fact, it’s usually a mistake to try and make it back the way that you lost it.”

In other words, there’s no need to stick with a losing investment in the hope it will rebound. The market offers countless other opportunities. Clinging to a poor performer can tie up capital that could be better used elsewhere.

Buffett’s advice is simple: let go of emotional attachments to past losses, and focus instead on smarter, more promising investments going forward.

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.

For long-term business success, few factors are as important as the quality of a company’s management. Warren Buffett believes that investors should focus on two key areas when evaluating leadership.

At the 1994 Berkshire Hathaway Annual Meeting, Buffett explained, “You judge management by two yardsticks: how well they run the business, and how well they treat their shareholders.”

The first involves understanding the business and assessing how management has performed over time—especially how they’ve allocated capital compared to competitors. It’s essential to consider the conditions they inherited and how effectively they’ve handled them.

The second measure is shareholder treatment. According to Buffett, good managers tend to act in the best interest of owners, while poor ones often neglect shareholders.

In Buffett’s experience, these two traits usually go hand in hand: managers who perform poorly often show little regard for shareholders. For investors, that’s a red flag worth watching.

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.