Nicknamed The Oracle of Omaha and boasting the title of the world’s richest investor, with a not-so-meagre net worth in the vicinity of $78 Billion USD, is Warren Buffett. Starting from humble beginnings equipped with $6,000 at the age of 15, Buffett hit the milestone of $1 million at 30 years old and $1 billion by the age of 57 years. Now, at 86 and with a substantial sum more to his name, we can only grovel at the feet of the financial genius at the helm of Berkshire Hathaway. The company cleared more than $24 billion in net earnings for the 2016/2017 financial year.
Even though he was rejected from Harvard Business School, you’d figure Buffett has some useful tips for those aspiring to climb to similar heights, here are our favourite pearls of wisdom from the third richest man on the planet:
1. On Patience:
"You can't produce a baby in one month by getting nine women pregnant: successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time."
2. On Opportunities:
"Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."
3. On Quality:
"Long ago I was taught that 'price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
4. On Beginners:
"You're dealing with a lot of silly people in the marketplace; it's like a great big casino and everyone else is boozing. If you can stick with Pepsi, you should be okay."
5. On Problems:
"After 25 years of buying and supervising a great variety of businesses, Charlie [Munger, Berkshire's Vice-Chairman] and I have not learned how to solve difficult business problems. What we have learned is to avoid them. To the extent we have been successful, it is because we concentrated on identifying one-foot hurdles that we could step over rather than because we acquired any ability to clear seven-footers."
6. On Buying Right:
"I call investing the greatest business in the world... because you never have to swing. You stand at the plate, the pitcher throws you General Motors at $47! U.S. Steel at $39! and nobody calls a strike on you. There's no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it."
7. On Fear and Greed:
"Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
8. On the Long-term:
"You only have to do a very few things right in your life so long as you don't do too many things wrong."
9. On Habits:
“Chains of habit are too light to be felt until they are too heavy to be broken. At your age you can have any habits or any patterns of behavior that you wish. It’s a matter of what you decide.”
10. And Lastly, On the Future:
"Someone's sitting in the shade today because someone planted a tree a long time ago."
For more on Warren Buffett and Berkshire Hathaway, have a read of his piece in the company’s 50th anniversary Letter to Shareholders (2014). It starts on page 24 and covers highlights from the past, present and future of the company.