“Charlie always pointed out that we made most of our money on about eight or nine ideas over fifty years.”
Warren Buffett
Warren is a patient man. Right now, he’s sitting on a giant pile of cash, just waiting for the right opportunity at the right price.
In a world of short term thinkers, Warren’s in no rush.
The legendary investor broke down his investment approach in Berkshire’s recent annual meeting. Let’s dig in!
Building for the Long Term
The biggest difference I can find between Warren and other CEO’s and investors is his incredibly long term orientation. It comes out when he discusses Berkshire’s investment in Japanese trading companies:
“…we expect to hold it for 50 or 100 years or more…” he says.
When have you ever heard a CEO talk about 50 or 100 years from now? Normally, they’re focused on the quarter, the year, and maybe a couple years after.
Thinking in such a long term fashion is even more incredible when you consider that Warren is 94!
If we want results like Warren’s, we cannot do what everyone else is doing. His very long term view is a key reason why he’s beating everyone else.
Acting Fast
Warren waits patiently for good opportunities, sometimes doing little for years. That’s why he’s sitting on $335 billion in Treasuries right now.
But when he sees an amazing deal, he strikes.
“We made a great deal of money because we were willing to act faster than anybody,” Warren explained
In my own little corner of the world, I try to do the same thing.
Last fall, a founder told me I had to meet Joseph from LedgerUp. So I cold e-mailed him and we were on Zoom within the hour.
Less than 24 hours later, I invested. I knew what I was looking for, and LedgerUp was it.
Great deals are rare. If we sit around hemming and hawing when one comes, we’ll miss it.
“You don’t want to be patient when the time comes to act. You want to get it done that day,” Warren said.
The American Advantage
Warren’s patience and decisiveness are two of the big reasons why he’s such a successful investor. But his biggest advantage is something most of us have too: being born in America.
“The luckiest day in my life was when I was born in the United States,” Buffett said.
This is especially true in tech. Nowhere else has the bazillion startups supported by limitless funding. Nowhere else has the can-do attitude we swim in like water.
When I talk to people in other countries, I can barely believe what I’m hearing. Their reports sound like dispatches from another planet.
People tear each other down for being successful. Anyone who fails at anything is scorned for life. The government goes after successful entrepreneurs.
In America, we don’t have to deal with any of that. For that, I am truly grateful.
“…it’s the greatest country in the world and you’ve got the greatest time in the world.”
Wrap-Up
Warren doesn’t operate like most investors.
He reads, studies, and mostly does nothing. When he makes a move, it is rapid and decisive. And he builds for the next century, not the next quarter.
No matter what we invest in, we can learn from Buffett. We can read, observe, and act quickly when we see the right opportunity.
Believe it or not, Warren doesn’t want to be known as the greatest investor ever. He’d rather be famous for something else instead.
“…the main thing I’d like to be known for is old age.”
Come back tomorrow for more lessons from the master!
More on investing:
The Berkshire Annual Meeting (Part 1)
My Biggest Lesson from Four Years Angel Investing
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