5 tips from Warren Buffett you can apply to earn solid returns on your investment in the long run He emphasized emotional discipline, patience for opportunities, and surrounding oneself with capable individuals. Buffett's investment philosophy can serve as inspiration for many individuals looking to build wealth in the long run
At 94, legendary investor Warren Buffett recently announced he would step down as CEO of Berkshire Hathaway by the end of 2025, concluding a remarkable 60-year tenure. In his farewell speech as well as a letter to shareholders, Buffett shared timeless pearls of wisdom.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
#Operation Sindoor
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Market-beating feat
19.9% (annualised return)55,02,284% (absolute)
Berkshire Hathaway
(1965-2024)
10.4% (annualised return)
39,054% absolute
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S&P 500 (1965-2024)Source: Berkshire Hathaway Inc
When you invest, check your emotions at the door
“If it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy because the world is not going to adapt to you. You’re going to have to adapt to the world.”What Buffett says
Volatility is a feature of stock markets, not a bug. Buffett surmises that in the next 20 years, there may come a phase that will be a “hair curler” compared to anything we have seen before. Such events keep recurring, and these typically unfold in dramatic ways. But that is just the way of the stock market. This very unpredictability makes the stock market a great place to invest in, but only if one has the temperament for it. On the other hand, it is not a good space for those who get frightened by markets that decline and get excited when stock markets go up.
Wait for the right opportunities
“The problem with the investment business is that things don’t come along in an orderly fashion, and they never will.”Buffett’s take
Buffett insists that investing is a very opportunistic activity. Stock prices get extraordinarily attractive very occasionally. Buffett pushed back against the idea that holding cash is bad. He explained that Berkshire holds large amounts of cash, isn’t out of fear but out of discipline and patience, waiting for good opportunities. When those come, having the cash to pounce on the opportunity matters. Berkshire made a lot of money by not wanting to be fully invested at all times. Buffett feels more comfortable buying when the chances of losing money are low. He favours making a few simple investments and sitting with them for life.
Surround yourself with people who are better than you
“Who you associate with is just enormously important. You want to hang out with people who are better than you are and that you feel are better than you are because you’re going to go in the direction of the people you associate with.”In Buffett’s words
Buffett recounts how he would try to be associated with smart people from whom he could learn a lot, as well as people with good intentions and pleasant behaviour. He stresses this is more important than simply aping somebody who makes a lot of money. Your life progress typically moves in the general direction of the people you work with, who you admire, and who are your friends. In work, for instance, you don’t want to associate with people or companies that ask you to do something that you shouldn’t be doing. Buffett advises freshers against focusing on the starting salary and being mindful of who you work for, because you will take on the habits of the people around you. What you really want is a job that you would want to hold on to even if you didn’t need the money.
Focus on businesses, not prices
“If you’re trying to trade on headlines or time the market, you’re not investing— you’re gambling.”Buffett’s mantra
Buffett encouraged investors to own a piece of a great business, not chase price action. He emphasised that true investing is based on long-term ownership of productive assets, not short-term bets. He noted that periods of intense speculation, like the tech bubble or crypto surges, often end in financial pain for most participants. Buffett warned that when markets are dominated by speculators, they lose their ability to rationally price businesses. This makes it harder for long-term investors to allocate capital effectively.
When the time comes, act fast
“There are times when you have to act fast. In fact, we’ve made a great deal of money because we’re willing to act faster than anybody around.”Buffett’s view
Even as he advocates waiting patiently for opportunities, Buffett reiterates that investors must be ready to strike quickly when conditions are right. Speed of response matters. He reflected on moments like the 2008 financial crisis and the 2020 pandemic when Berkshire moved faster than others. However, this speed is useful only if one has done the necessary homework. He warned that acting fast shouldn’t mean rushing blindly and chasing what’s popular.
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This story originally appeared on: India Times - Author:Faqs of Insurances
