Tag: Warren Buffett

In the throes of speculative mania, when even the most unprofitable stocks are propelled skyward, it’s all too tempting to lose sight of a fundamental truth: enduring triumph in the realm of investment hinges not on the capricious dance of stock prices but on the bedrock of a company’s profitability. Amidst the frenzy,Warren Buffett points out that the enduring value of an investment is inexorably bound to the prosperity of the underlying business, not the ephemeral whims of the market.

“The only money investors are going to make, in the long run, are what the businesses make,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “I mean, there is nothing added. The government doesn’t throw in anything. You know, nobody’s adding to the pot. People are taking out from the pot, in terms of frictional cost, investment management fees, brokerage commissions and all of that.”

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© 2023 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 an investor that has truly scaled his investments to a size that is almost impossible to conceive. However, Buffett is quick to point out that compounding small sums is much easier than large. And the larger the sum you start with, the harder it become to continue to compound it over time.

“I think, working with a very small sum, that there is an opportunity to earn very high returns,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “But that advantage disappears very rapidly as the money compounds.”

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© 2023 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.

One of the best safeguards against the erosive tides of inflation extends beyond the mere amalgamation of assets within one’s investment portfolio, notes Warren Buffett. Equally if not surpassingly pivotal, lies the endeavor to enhance one’s own intrinsic value to the utmost degree conceivable.

“The best thing you can do is to be exceptionally good at something. If you’re the best doctor in town, if you’re the best lawyer in town, if you’re the best whatever it may be, no matter whether people are paying you with a zillion dollars, they’re going to give you some of what they produce in exchange for what you deliver,” Warren Buffett said at the 2022 Berkshire Hathaway Annual Meeting. “And if you’re the one they pick out to do any particular activity, sing, or play baseball, or be their lawyer, whatever it may be, whatever abilities you have can’t be taken away from you, they can’t actually be inflated away from you.”

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© 2023 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.

When you see an investor such as Warren Buffett buying whole companies, you might think that as a small investor you can’t get the bargains that huge investors can get. However, Buffett disagrees. Although he prefers to buy whole companies, he recognizes that buying pieces of companies often represents better value, as you don’t have to pay a premium for them.

“We’ve always wanted to acquire entire businesses. People never seem to really believe that, back when we were buying See’s Candy or the Buffalo News or National Indemnity. But that’s been our number one preference right along,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “It’s just that we’ve found that much of the time we could get far for more our money, in terms of wonderful businesses, by buying pieces in the stock market, than we could by negotiated purchase.”

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© 2023 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.

Few can hope to reach the heights of investing genius embodied by Warren Buffett. However, Buffett himself humbly suggests that the majority of profitable investments do not spring from extraordinary brilliance, but rather arise from astutely capitalizing on the missteps of others. In essence, success in the realm of investment hinges on an ability to recognize and seize upon the errors committed by one’s counterparts. This notion underscores the critical importance of a shrewd and discerning mindset in navigating the complex and ever-shifting terrain of financial markets.

“What gives you opportunities is other people doing dumb things,” Buffett said at the 2023 Berkshire Hathaway annual meeting. “Well, the 58 years we’ve been running Berkshire, I would say there’s been a great increase in the number of people doing dumb things. And they do big, dumb things, and the reason they do it to some extent is because they can get money from other people so much easier than when we started.”

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© 2023 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, in his characteristic wisdom, emphasizes that investors need not dwell on a business’s past actions but should instead focus on its future endeavors. He understands that the past is not always a reliable predictor of a company’s trajectory. For Buffett, true investing lies in peering into the horizon, discerning the opportunities that lie ahead. As he aptly puts it, “That’s what investing is, is seeing out.”

“You don’t get paid for what’s already happened. You only get paid for what’s going to happen in the future,” Warren Buffett said at the 2007 Berkshire Hathaway Annual Meeting. “The past is only useful to you in the extent to which it gives you insights into the future, and sometimes the past doesn’t give you any insights into the future.”

Hear Buffett’s full explanation

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© 2023 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.

Index funds have exploded in popularity over the past three decades, and it is easy for investors to think that this simple form of investing is somehow second best. However, over twenty years ago, Warren Buffett already looked at index funds as one of the best opportunities for the average investor to buy equities.

“For the average investor who wants to own equities over a twenty or thirty year period, we think regular investment in some kind of very low-cost pool of money, which might well be an index fund, probably makes as much sense as anything,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “But it’s important to keep the cost down,” he added.

Hear Buffett’s full explanation

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© 2023 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.

Whether it is something as futuristic as the metaverse, or something as mundane as ride-sharing, Warren Buffett is quick to point out that just because an industry is on the cutting-edge, and will be transformational to the world, doesn’t mean it will be a good investment. As Buffett famously said “If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money.”

“There’s a lot of difference between making money and spotting a wonderful industry. You know, the two most important industries in the first half of this century in the United States, in the world, probably were the auto industry and the airplane industry,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “Here you had these two discoveries, both in the first decade, essentially in the first decade of the century. And if you’d foreseen, in 1905 or thereabouts, what the auto would do to the world, let alone this country, or what the airplane would do, you might have thought that it was a great way to get rich. But very, very few people got rich by being, by riding the back of that auto industry. And probably even fewer got rich by participating in the airline industry over that time.”

Hear Buffett’s full explanation

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© 2023 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 offers a unique perspective on crafting a meaningful existence. His advice, though unconventional, is a profound invitation to introspection and deliberate living. He suggests that to determine how one wants to live, it is wise to start with the end in mind and reverse engineer the desired outcome.

“You should write your obituary and then try and figure out how to live up to it,” Buffett said at the 2023 Berkshire Hathaway annual meeting. This unconventional approach to personal introspection challenges us to consider our own mortality, prompting us to reflect on the legacy we wish to leave behind.

By visualizing the narrative of our lives through the lens of an obituary, we gain clarity about our core values, priorities, and aspirations. It compels us to ask ourselves: How do we want to be remembered? What contributions do we want to make to the world? What impact do we desire to have on our loved ones and society at large?

Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2023 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.