Every year, tens of thousands of investors flock to Omaha — and many more tune in around the world – to watch Berkshire Hathaway chairman Warren Buffett field questions from shareholders at his company’s annual meeting.
This year, as ever, Buffett shared his insights not only on the financial fundamentals behind Berkshire’s many subsidiaries and portfolio companies, but also the path to a successful life.
This year’s entire 4-plus-hour affair is worth a watch, listen or read. But without getting into the nitty-gritty, here’s two key pieces of advice Buffett shared on Saturday — one about money, and one about life.
One shareholder asked Buffett about one of the most fundamental decisions any investor can make: when to buy or sell an investment.
The description of the process he and longtime partner Charlie Munger employed offers tremendous insight to his investment philosophy.
“Charlie and I made decisions extremely fast, but in effect after years of thinking about the parameters that would enable us to make the quick decision when it presented itself,” he said.
He didn’t make his sizable investment in Apple, he said, until he felt he had a full grasp of consumer behavior, an understanding he came to after owning several other consumer businesses, both successful and unsuccessful.
After years of gathering intelligence on a particular subject, he said, “there is something that comes along and ticks a whole bunch of observations that you’ve made and knowledge you have, and then crystallizes your thinking into action, big action in the case of Apple.”
The point for investors: Buffett doesn’t buy any investment based on vibes or impulse. Only after he determined that the iPhone was “maybe the greatest product of all time,” did he buy.
Meanwhile, he never worries about missing out on an investment if it involves a product or company that he hasn’t devoted exhaustive research to.
“Charlie and I missed a lot of things … we never worried about missing something that we…
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