From selling gum for income as a child to changing the fabric manufacturing company Berkshire Hathaway to a giant conglomery and one of the biggest components of S&P 500, Warren Buffett has shared countless pieces of investment advice in recent years.
Buffett is widely considered the greatest investor of all time, so when he talks, fellow investors are usually a good idea for us to listen. He was not called “The Oracle of Omaha” without it.
Buffett announced his removal as CEO of Berkshire Hathaway by the end of the year during the company's 2025 shareholder meeting. So, in respect of his seemingly endless flow of investment wisdom – Buffett remains as chairman, so he has not retired completely – here are 9 important investment lessons from 60 years of Berkshire Hathaway annual Shareholder letters.
1. Invest in businesses you understand
Advice:
Only invest in companies you can thoroughly check. And have some humility – acknowledge what you don't know, and don't invest in a business you don't understand. Buffett sold the Coca-Cola Door-to-door as a child, invested in Coca-Cola stock in 1988 and collected $ 776 million in dividends in 2024.(1)
You don't have to be an expert in every company, or even many. You only need to check the companies within your circular circle. The size of that circle is not very important; Knowing its boundaries, however, is important.
SHAREHOLDER LETTER: 1996
2. Buy good companies at fair price
Advice:
Buy high quality companies in reasonable values. Don't buy an unusual business just because it's cheap. Berkshire Hathaway bought the see candies in 1972 for $ 25 million and recorded pre-tax revenues of $ 1.65 billion from the company to 2011.(2) He was called see “the prototype of a dream business.”(3)
Better to buy a wonderful company at a fair price than a fair company at a wonderful price.
SHAREHOLDER LETTER: 1989
3. Think of long-term
Advice:
Avoid frequent trading and handle investments for long -term to benefit from business growth. Over time, solid companies increase their revenues, expand and change.
In fact, when we shave parts of the remaining businesses with remaining management, Our favorite handling period is forever.
SHAREHOLDER LETTER: 1988
4. Focus on intrinsic value
Advice:
Invest based on the intrinsic value of a company, not market price. Markets may not be justified.
We defined the intrinsic value as a discount amount of cash that can be obtained in a business during its remaining life. Anyone calculating the intrinsic value must appear a highly subjective figure that will change both as the estimates of future cash flows are modified and as interest rates move. Despite its losses, however, The amount of intrinsic is important and the only logical way to assess the relative attractiveness of investments and business.
SHAREHOLDER LETTER: 1994
5. Be greedy when others are afraid
Advice:
Buy when markets are pessimistic to secure undervalued assets. Stay reasonable when others lose their heads. In 2008, during the global financial crisis, Buffett invested $ 5 billion in Goldman Sachs' golden stock. Goldman Sachs redeemed shares in 2011, earning Berkshire Hathaway a $ 3.7 billion income.(4)
What we know, however, is that the occasional uprisings of two extremely painful illnesses, fears and greed, will forever take place in the investment community. The timing of these epidemics is unpredictable. And the markets in the market made by them are equally unpredictable, both to duration and degree. Therefore, we do not try to expect to come or remove any of the disease. Our goal is more modest: We only try to be afraid when others are greedy and only greedy when others are afraid.
SHAREHOLDER LETTER: 1986
6. Avoid emotional investment
Advice:
Make investment decisions based on evaluation, common sense and good judgment, not emotional reactions. Avoid seizing fear and greed.
In my opinion, investment success will not be done by arcane formulas, computer programs or signals that have been stabbed by the price of stock and market prices. Rather, A investor will succeed by biting a good discretion in the business with the ability.
SHAREHOLDER LETTER: 1987
7. Ignore the noise in the market
Advice:
Focus on the foundations of a company and long-term prospects-the business you invest-not short-term market predictions or media hype.
Developing macro opinions or listening to the macro or market predictions is a waste of time. In fact, this is dangerous because your vision can be blurred by the facts that are truly important. (When I hear TV commentators who know how to work on what the market will do next, I reminded Mickey Mantle's comment: “You don't know how easy this game is until you get into that broadcasting booth.”)
SHAREHOLDER LETTER: 2013
8. Value of competent management
Advice:
Think of investment in stock as being a part-owner of a company. Who do you like by your side? Invest in businesses run by honest and competent managers.
We choose our purchased security security in the same way that we will review a business for taking it in its entirety. We wish the business is (1) one that we can understand, (2) with favorable long-term prospects, (3) Run by honest and competent people and (4) Available at a attractive -attractive price.
SHAREHOLDER LETTER: 1977
9. Patience is a virtue
Advice:
Wait patiently for investment opportunities that meet your criteria, avoiding unnecessary action. Also, give your investment time to grow, and trust the long -term potential of strong businesses.
Learn patience. Having a long span of attention and the ability to concentrate on something for a long time is a huge advantage. ” – a thought of Charlie Munger.
SHAREHOLDER LETTER: 2022
Bottom line
Warren Buffett's decades of shareholder letters have boiled it: invest in what you understand, stay disciplined and patiently play a long game. From choosing businesses with strong foundations to staying patients for the right time, Buffett's lessons have no specific time and a tested and trusted roadmap to smarter investment.
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