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Lessons From Warren Buffett: This Is the Best Investment a Young Person Can Make

As you develop an interest in investing it is natural to look around and wonder what is the best thing for you to invest in. Is it stocks, real estate, commodities, or foreign currencies? Warren Buffett has a very straight forward answer to that question, and it is one investment that he would happily make. It is investing in yourself. By that he means improving your capabilities.

“I think that the best investment you can have, for most people, is in your own abilities,” Warren Buffett noted at the 2005 Berkshire Hathaway Annual Meeting. “I would pay a student, in many cases, I would be glad to pay them one hundred thousand dollars, cash up front, for ten percent of all their future earnings. So, I’m willing to pay one hundred thousand dollars for ten percent of them, I’m valuing the whole person at a million dollars, just capital value standing there in front of me.”

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© 2022 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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Warren Buffett

Warren Buffett Donates $759 Million to Charities

(BRK.A), (BRK.B)

It’s a very happy Thanksgiving at a number of charities that recently received large donations from Warren Buffett, who continues to give away his fortune in Berkshire Hathaway stock.

Buffett donated 2.4 million B shares of Berkshire Hathaway, with a value of roughly $759 million, to a number of charities, including 1.5 million shares to the Susan T. Buffett Foundation.

The Susan T. Buffett Foundation has offered scholarships to college students in Nebraska for over 50 years, and is named for his late first-wife.

Additional charities receiving donated shares include:

A total of 900,000 shares split between charities overseen by his children Howard, Susan and Peter: the Howard G. Buffett Foundation, the Sherwood Foundation and the Novo Foundation.

Since 2006, Warren Buffett has donated more than half of his Berkshire shares, with a value of over $46 billion at the time of the donations.

© 2022 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 a 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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Lessons From Warren Buffett

Lessons From Warren Buffett: A Great Moat Is Even Better Than Great Management

Having an invincible fortress of a business run by great management is the ideal situation for an investor, but forced to choose between the two, Warren Buffett would take the moat over the management. “If you have a big enough moat, you don’t need as much management,” Buffett notes.

“It gets back to Peter Lynch’s remark that he likes to buy a business that’s so good that an idiot can run it, because sooner or later one will,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “He was saying that what he really likes is a business with a terrific moat where nothing can happen to the moat, and there aren’t very many businesses like that.”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: Why I Don’t Worry About Selling at the Top

It would seem logical that an investor wants to buy low and sell high, and that ideally that sale should be at or near the highest share price that a stock reaches. However, Warren Buffett sees it differently, and he has no fear that others make money off a stock that he’s sold. In fact, he thinks it is an indicator that as an investor you are on the right track when it comes to looking for superior businesses.

“I would worry, frankly, if I sold a bunch of things right at the top, because that would indicate that, in effect, I was practicing the bigger fool-type approach to investing, and I don’t think that can be practiced successfully over time,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “I think the most successful investors, if they sell at all, will be selling things that end up going a lot higher, because it means that they’ve been buying into good businesses as they’ve gone along.”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: When It Comes to Money, It All Spends the Same

It is easy for investors to get so wrapped up in a hot sector or company that they can lose sight of the fact that it in the end it is all about making money, and as Warren Buffett points out, a dollar from the hottest high tech company is no better than a dollar from a completely out of fashion industry.

“Whether the money comes from a bank, whether it comes from an internet company, or whether it comes from a brick company, the money all spends the same,” Warren Buffett said at the 2002 Berkshire Hathaway Annual Meeting. “Now the question is, what are the economic characteristics of the internet company or the bank or the brick company that tell you how much cash they’re going to generate over long periods in the future.”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: No One Has Been Successful at Predicting the Market

“Where Are Markets Headed? Six Pros Take Their Best Guess” was the headline in The Wall Street Journal. Clearly, much is written, and even more is probably spoken on financial shows, about where the market is headed. Is it at a peak? Is it at the bottom? Will it be higher or lower a week, month or year from now? Warren Buffett thinks that such prognostications are ultimately useless when it comes to actually making money.

“I know of no one that has been successful at, and really made a lot of money, predicting the actions of the market itself,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “I know a lot of people who have done well picking businesses and buying them at sensible prices.”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: If Their Accounting Confuses You, Stay Away

If in reading a company’s financial reports it doesn’t make any sense to you, then avoid the company all together, Warren Buffett advises.

“I would say that when the accounting confuses you, I would just tend to forget about it as a company,” Warren Buffett said at the 1995 Berkshire Hathaway Annual Meeting. “We have never had any great investment results from companies whose accounting we regarded as suspect. I can’t think of a one.”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: What is Investing?

Exactly what is investing and what differentiates it from gambling? Warren Buffett gives a clear, concise answer.

“Investment is the process of putting out money today to get more money back at some point in the future,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “And the question is, how far in the future, how much money, and what is the appropriate discount rate to take it back to the present day and determine how much you pay?”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: Always Think of Stocks as Businesses

There are so many complicated investing schemes, but for Warren Buffett it all comes down to capital allocation.

“If you understand business, you understand investments,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “Investments are simply business decisions in terms of capital allocation.”

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© 2022 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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Lessons From Warren Buffett

Lessons From Warren Buffett: Can’t Find a Good Investment? Beware Enlarging Your Circle

Every investor has a circle of competency that encompasses the companies and types of investments that they understand. What do you do when you can’t find anything that fits in that circle? In Warren Buffett’s case, he prefers to wait rather than hoping he can enlarge the circle.

“If we have trouble finding things within our circle, we will not enlarge the circle,” Warren Buffett said at the 1995 Berkshire Hathaway Annual Meeting. “You know, we’ll wait. That’s our approach.”

Warren Buffett is quick to point out that just because something in not in your circle of competency, it doesn’t mean it isn’t in somebody else’s. What Buffett understands when it comes to technology companies and what Bill Gates understands are vastly different. However, Buffett wants to understand it himself, not just take a recommendation from someone more expert than him.

Hear Buffett’s full explanation

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© 2022 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.