Warren Buffett (born August 30, 1930) is a renowned and legendary American investor, businessman, and philanthropist. He is most famous for his sixty-year run leading Berkshire Hathaway, the multinational conglomerate holding company he took control of in 1965 and built into one of the most valuable companies in the world. He is one of the most and influential and successful investors in history. Buffett’s approach has become known as “value investing” and focuses on long-term holding of assets (as opposed to trading/speculating), buying at the right price relative to value, fundamental analysis, and patience. He is revered in the investment and business world. Buffett’s annual shareholder letters are highly anticipated yearly events and offer timeless investment advice. Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska is attended by upwards of 40,000 people to listen to his all day Q&A session.
Almost all of it happened at a desk. From his Omaha office, with a headquarters staff of about twenty-five people running an empire of dozens of wholly owned companies, he spends most of each working day reading: hundreds of annual reports and financial statements a year, five newspapers before the office stirs, five or six hours of it daily by his own account. The companies Berkshire owns are left to their own managers to run, with no marching orders from headquarters. Buffett’s work is to decide where the next dollar of cash should go, to take the occasional phone call, and to write the annual letter himself. It worked that way from the start: in 1956 he began investing other people’s money in partnership form with $105,100, only a hundred dollars of it his own, and compounded it at roughly thirty percent a year for thirteen years. In 1965 he took control of Berkshire Hathaway, then a struggling textile maker, and slowly made it the vehicle for everything that followed.
Apart from Berkshire Hathaway’s success, Buffett is admired for his integrity, wisdom, and sage advice delivered in folksy manner. Despite being one of the richest people in the world, he has a reputation for frugality and humility. He is known for many insightful sayings and aphorisms applicable to investing, business, and leading a good and principled life.
Core Ideas
- Buy wonderful companies at fair prices. Pay up for a first-class business rather than bargain-hunt a mediocre one; time keeps compounding the good business.
- Move against the crowd’s mood. Be fearful when others are greedy and greedy when others are fearful; the sillier the market behaves, the greater the opening.
- Protect reputation more than money. A reputation takes twenty years to build and five minutes to ruin; a lost dollar can be understood, a shredded name cannot.
- Read and think before acting. Give most of the day to reading and quiet thought, say no to almost everything, and wait until quality is marked down.
- Invest in yourself and plant early. Nothing compounds like what you build into yourself, and someone sits in the shade today because someone planted a tree a long time ago.
Warren Buffett Quotes
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Berkshire Hathaway Letter, 1989
“Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.”
“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”
The New York Times, October 2008
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
Berkshire Hathaway Letter, 2008
“The sillier the market’s behavior, the greater the opportunity for the businesslike investor.”
“You only learn who has been swimming naked when the tide goes out.”
Berkshire Hathaway Letter, 2007
“Your best investment is yourself. There is nothing that compares to it.”
“Price is what you pay. Value is what you get.”
Berkshire Hathaway Letter, 2008
“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.”
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
“The difference between successful people and really successful people is that really successful people say no to almost everything.”
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.”
Warren Buffett Books
“The Essays of Warren Buffett: Lessons for Corporate America” – by Warren E. Buffett, selected and arranged by Lawrence A. Cunningham. Buffett in his own words, drawn from decades of shareholder letters and ordered by topic; the nearest thing to a book he ever wrote.
“The Snowball: Warren Buffett and the Business of Life” – by Alice Schroeder. The only authorized biography, built on years of interviews and his full cooperation; the most complete portrait of the man behind the record.
“Buffett: The Making of an American Capitalist” – by Roger Lowenstein. The classic independent biography, strongest on the Omaha partnership years and the making of the method.
“The Warren Buffett Way” – by Robert G. Hagstrom. The investing tenets distilled from his purchases and holdings; the clearest study guide to applying them yourself.
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