In honor of Warren Buffett’s retirement announcement, here are ten of his most enduring pieces of advice for long-term investors, drawn from decades of shareholder letters, interviews, and speeches. These reflect his core investing philosophy focused on discipline, patience, and value.
- “Investing is simple, but not easy.” The formula for successful investing is simple. Executing that formula requires, patience, emotional control, and long-term perspective.
- “The most important quality for an investor is temperament, not intellect.” Emotional discipline trumps intelligence.
- “Diversification is protection against ignorance.” Unless an investor has the skill, time, and temperament to deeply understand businesses, broad diversification is the best long-term strategy.
- “The stock market is designed to transfer money from the Active to the Patient.” Time in the market beats timing the market.
- “Be fearful when others are greedy, and greedy when others are fearful.” Buffett advocates contrarian investing – buying when markets are down and not chasing euphoria.
- “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.” Avoid short-term thinking and speculative behavior.
- “Our favorite holding period is forever.” He believes in long-term ownership, not trading.
- “Price is what you pay; value is what you get.” Don’t confuse stock market prices with the true worth of the businesses in your portfolio.
- “You only find out who is swimming naked when the tide goes out.” Sound financial planning is only obvious in a crisis.
- “An investor needs to do very few things right as long as he or she avoids big mistakes.” Stay fully invested, control investment costs, and rebalance your portfolio opportunistically – but never interrupt the compounding of your investment returns unnecessarily.
The markets of the last few months have again taught us two things. First, Buffett’s advice is timeless. Second, an investment philosophy anchored by discipline, diversification, patience, and a long-term perspective will always serve investors well.
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