What We Can Learn From Great Investors Like Warren Buffet

Warren Buffet is synonymous with investing, known by all as a legendary investor, businessman and the billionaire who still lives in the same house he bought when he was in his twenties. How did this young man from Omaha, who began investing at just 11 years old (and bought a farm at 14), become so successful? In our opinion: by living by his calm, rational philosophy and not deviating from his approach. 

3 Things Warren Buffet Did Right On His Journey To Billionaire

1. He Started Early

This one may be a bit obvious, but the earlier you start investing, the more time you are working with — and it’s always nice to have time on your side. Anyone who has looked into the amazing power of compound interest knows that, over time, the initial investment becomes more powerful as the interest it earns is reinvested and earns interest itself. Warren made his first investment at age 11, so he not only took advantage of his time in the market, but has been a student of it since most kids were learning how to write a book report.

2. He Focuses On What He Knows & Can Control

 We can say with near 100% certainty that Warren Buffet isn’t making moves in the market based on a hot tip or the latest popular tech stock. Much of Warren’s approach to investing involves picking businesses he believes in and buying a controlling share of them. He picks businesses within sectors he knows inside and out, like food and beverage giants See’s Candy and Coca-Cola and unique franchises like newspapers (he owns all or majority shares in a few, including the Washington Post Company and the Buffalo News). He does his homework so that, when he decides he’s ready to make a move, he’s reasonably sure it will be a hit. His role as a majority owner certainly helps to reassure him that he knows the direction of those businesses, or will at least have the opportunity to steer them.

3. He Takes Risks & Doesn’t Stress About Diversifying

When Warren’s in, he’s all in. When he decided to invest in GEICO in 1996, he didn’t start small and stay diversified to protect himself — he sold stocks and invested 75% of his net worth. As the saying goes, he put his eggs in one basket and then he did not take his eyes off that basket. Today he, and his company, Berkshire Hathaway, are still the majority shareholders in GEICO. This is another lesson to be learned from Warren: it pays to focus on the long term and not be emotional about short-term rises and falls. Our approach is similar: we focus on sectors we understand thoroughly, pick companies we believe in and make reasoned decisions with a long-term view.

Are You On Track For Your Wealth Goals?

We can’t all be Warren Buffet, but we can certainly work towards the financial future of our dreams. An Ultra-High Net Worth wealth management firm like Weber Global Management will apply decades of investment experience and global capabilities to protect and grow the wealth you have accrued. To learn more about how you can benefit from our services, reach out to our investor relations.