The wisdom of Warren Buffett is something that countless investors have attempted to distil. As youโll quickly discover, the Oracle of Omahaโs mind + mentality simply cannot be summarised in its entirety via WikiHow articles or any number of A Dummiesโ Guide instalments. The man behind Berkshire Hathaway did, however, offer quite an insightful interview segment almost forty years ago that encapsulates his core investing philosophy, aptly dubbed by whoever uploaded the invaluable archival footage: Warren Buffett โ How To Pick Stocks & Get Rich (1985).
โThe first rule of investment is donโt lose,โ Buffett opens with.
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โAnd the second rule of investment is donโt forget the first ruleโฆ and thatโs all the rules there are. If you buy things for far below what theyโre worth, and you buy a group of them, you basically donโt lose money.โ
The conversation soon navigates to what would otherwise be more nebulous topics which Warren Buffett somehow manages to break down for easy viewing โ ranging from the most important quality an investment manager can have (โItโs a temperamental quality, not an intellectual qualityโฆ you donโt need tons of IQ in this business.โ); what he did/does differently in comparison to 90% of other money managers (โAll the ticker tells me is the priceโฆ but prices donโt tell me anything about a business. I would rather value a business or a stock first before knowing the price.โ); combatting investment FOMO โ an exceedingly crucial lesson in the era of cryptocurrencies โ (โI donโt have to make money in every game, I donโt know what cocoa beans are going to do, thereโs all kind of things I donโt know about.โ); and plenty more.
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But digestibility isnโt even the most incredible aspect of what youโre about to experienceโฆ itโs the fact that forty years on, Buffett has been remarkably consistent in his beliefs. And itโs clearly paid off given he currently retains a net worth of well over $100 billion while Berkshire Hathaway is ticking along just fine (and will continue to tick along just fine under the leadership of his recently announced successor, Greg Abel).
Check out Warren Buffett โ How To Pick Stocks & Get Rich (1985) above.
