If you are reading this blog, you know who Warren Buffet is.
He, truly, needs no introduction.
The Oracle of Omaha is widely considered among the most successful investors of all time. Berkshire Hathaway Inc., where he has been CEO for the past 44+ years, heavily invests in the insurance and financial services, logistics, real estate, utilities, retail, manufacturing, and media industries. They own iconic brands such as Duracell, Dairy Queen, Business Wire, and GEICO. Additionally, they hold significant shareholders in Amex, Bank of America, DaVita, Kraft Heinz, and others.
The story of Buffet’s rise has been well documented. His lifestyle, philanthropy, personal views, investment philosophy, and financial acumen have inspired generations. His pioneering value-investing approach is now an industry norm. His focus on business fundamentals, growth potential, and long-term growth has reshaped investment management.
Warren Buffett was born in Omaha, Nebraska, where he still lives. He showed a keen eye for investing early on, buying his first stock at the age of 11. The son of a politician, he went to UPenn’s Wharton School of Business, University of Nebraska, and Columbia Business School. He started his first company in 1956, and in 1965, took a controlling stake in a failing textile company, Berkshire Hathaway, transforming it into an investment holding company.
His investment philosophy bears the imprint of his mentors, Benjamin Graham and Philip Fisher. Graham showed him the value of the margin of safety approach, which emphasises buying stocks in undervalued and reasonably priced companies. Buffett adopted Fisher’s appreciation for strong leadership and effective management of a firm, investing for long-term appreciation.
Here, at ATLAS Edge, in celebration of our Executive Program in Investment Management, we have curated six of Warren Buffet’s enduring quotes – investment advice and financial wisdom from the sage himself.
“Be fearful when others are greedy, and greedy when others are way fearful.”
One of the most iconic Warren Buffet quotes expresses his contrarian approach, pressing against herd mentality and bull runs. He warns against overvalued stocks during boom times and looks for hidden opportunities when markets crash. He famously avoided the dot-com bubble of the late 1990s and was well insulated when the bubble burst in 2000. In recent times, he has warned against cryptocurrencies, contending that greed is driving value where one should be wary.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Buffet advises investors to look at companies with underlying strength in their fundamentals, competitive advantages, and long-term growth prospects. It captures the essence of his value-investing approach, focusing on the quality of the company, rather than just the price of its stock, to generate significant returns over many years. His blockbuster investments in Goldman Sachs at the height of the 2008 crash and Apple in its early days are often cited as examples of this advice in action.
“Our favourite holding period is forever.”
Buffet disavows frequent trading or trying to regularly ‘game the market.’ He strongly advocates holding to quality investments for an extended period, even indefinitely. This is both financial, corporate, and social ethic, allowing investors to become long-term stakeholders and drive holistic growth and development in the company. It extends to all areas of business and helps build deep relationships with the organisation and the communities it serves. Buffet has decades-long investments in corporate giants such as Coca-Cola and American Express.
“Risk comes from not knowing what you’re doing.”
Investors need to make informed investment decisions. There is no shortcut here. Buffet is thorough in his research and dives deep into the company, its market, competition, existing conditions, trends, history, and so on. This due diligence helps make informed decisions and avoid surprises and untoward losses. It also helps investors calibrate their investments according to their risk appetite and avoid complex instruments they don’t understand. This quote tells us that risk is not an abstract force beyond our control, but a product of our knowledge and decisions.
“Price is what you pay, value is what you get.”
Of course, the cheerleader for value investing asks every investor to carefully evaluate the distinction between the cost of something (price) and its true worth or benefit (value). This quote underscores the idea that the price you pay for a product or service may not always reflect its actual value or quality. Stock prices don’t reflect value. Investors need to differentiate between valuation and value and invest wisely in businesses with core strengths.
“Someone is sitting in the shade today because someone planted a tree a long time ago.”
This sage advice sums up the wisdom of generations past. Warren Buffet asks all investors to be patient and resilient to build long-term value. Wealth creation and financial security need time, discipline, and consistent effort. Like the growth of a tree that needs time and strong roots, strong investment portfolios need foresight, delayed gratification, discernment, and a long-term perspective. Buffet’s portfolio speaks to this wisdom as his net value reflects the strong investments he has made and nurtured over many years.
