Warren Buffett is arguably the greatest investor of our time. His investment philosophy and business wisdom have stood the test of time. At 91 years old, he has accumulated a net worth of over $100 billion through his holding company Berkshire Hathaway.
In a recent interview, Buffett shared his timeless investment lessons and insights into business and life. The key takeaway is that successful investing is about owning stable and valuable businesses for the long run, not predicting short term stock movements. As Buffett puts it:
I’m buying this is a overwhelmingly American Business ah and I’m happy when that’s happy when that’s ..when I’m doing it.I’m happy when stocks are going down because I I can buy more of them with the same amount of money.
Buffett’s investment philosophy is centered around value investing - identifying strong and stable businesses trading at a discount, and holding them for the long run. He sees stocks as ownership in businesses, not just tickers that go up and down. As he explains:
Let’s Pretend there is no stock market. Let’s say I had to buy these privately like you buy a farm privately Or buy an apartment house private… if I have a farm it’s going to take me a while but I I it is people will be so much better if they if they actually didn’t have a stock market in terms of buying businesses.
This mindset allowed Buffett to weather market crashes and downturns without panic. He remained focused on the fundamentals of his businesses, not short term price fluctuations. As he said, “90% of people that buy stocks don’t think of them the right way.” They see stocks as something that will rise in the short term, causing them to feel good or bad based on daily price changes.
In contrast, Buffett approaches stocks with a “business owner’s mindset.” His time horizon is years and decades, not days or months. He asks himself: will this business be around and thriving many years from now? Will it provide good value to customers and earn a solid profit? If so, short term price drops are an opportunity to buy more of the business at a discount.
This mindset has enabled Buffett to achieve one of the best investment track records of all time. $1,000 invested in Berkshire Hathaway stock in 1965 would be worth nearly $20 million today. Despite his immense success, Buffett remains humble and optimistic about the future. As he reflects:
The world has changed a lot since that report was written but the world changed a lot in 2000 two years ago. More people a greater percentage of the American population is is wealthy now or having more income now than they’ve ever had …if you look at whether Bank of America giving their average deposit I mean you just look at the wealth and that and that doesn’t mean everybody’s wealthy but it does mean relative to any other period of the time , people have more money now they have they have they get mortgages at lower rates than they’ve ever gotten.
Buffett’s success and optimism show that the American Dream is still alive. With hard work, determination, and the right mindset over time, ordinary people can achieve extraordinary things. Buffett’s life and investment philosophy serve as an inspiration and roadmap for value investors all over the world. By focusing on strong businesses and holding them for the long run, we too can achieve solid returns through storms and work towards financial freedom.
In sum, here are Buffett’s key lessons for investors:
Approach stocks as businesses, not tickers. Value stable and profitable businesses.
Have a long term mindset. Ask if the business will thrive in years and decades ahead.
Don’t panic over short term price drops. It’s an opportunity to buy more of a good business.
Find work you enjoy and are good at. Surround yourself with people who inspire you.
Success is achieving your key life goals and gaining freedom, not just money. Help others along the way.
By following these timeless lessons, we can learn from Buffett’s life wisdom and use money as a tool to gain freedom and help others. Value investing, optimism and determination can continue to change lives for the better. The future remains bright.