The unflappable chairman of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) is widely considered to be the most successful investor of the 20th century and still going strong in the 21st. Not only is Warren Buffett a successful businessman, but also a great author, philanthropist and inspiration to many people, not to mention among the wealthiest people on the planet. His decades of investing wizardry and success also make him one of the most followed investors in the world. Not surprising, as it makes perfect sense to follow someone with such superlative credentials, especially when it is in your own interest. After all, there’s no harm in learning from the best, even if it is for mere inspiration, is there?
Buffett has been dishing investing …show more content…
While the markets are filled with overwhelming information and numerous complexities, it is not essential or possible for an investor to know about everything in the markets. You don’t have to know how to value every security from every sector, industry or asset class. “You have to stay within your circle of competence” and choose investments that make absolute sense to you. As a result, one thing that Buffett doesn’t really practice is diversification. He believe “wide diversification is only required when investors do not understand what they are …show more content…
Buffett is convinced that “you don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” In other words, you don’t have to be exceptionally talented to be a successful investor. In fact, he and Charlie Munger (Vice Chairman at Berkshire Hathaway) often argue that intelligence hinders what would otherwise be simple decision-making. This is particularly the case when intelligence causes investors to form and follow complex strategies or mathematical models that appear to forecast the future, notwithstanding, future cannot be perfectly predicted. At Berkshire Hathaway’s Annual Meeting in 2009, Buffett noted that “emotional stability and inner peace about your decisions” is more important to succeed in markets than outright brilliance. At the same event, Munger – supporting Buffett’s view – drew attention to the role of complex calculations and projections in some of worst business decisions that he had seen, while mocking business schools for teach those methods “because, well, they have to do
Buffett has been dishing investing …show more content…
While the markets are filled with overwhelming information and numerous complexities, it is not essential or possible for an investor to know about everything in the markets. You don’t have to know how to value every security from every sector, industry or asset class. “You have to stay within your circle of competence” and choose investments that make absolute sense to you. As a result, one thing that Buffett doesn’t really practice is diversification. He believe “wide diversification is only required when investors do not understand what they are …show more content…
Buffett is convinced that “you don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” In other words, you don’t have to be exceptionally talented to be a successful investor. In fact, he and Charlie Munger (Vice Chairman at Berkshire Hathaway) often argue that intelligence hinders what would otherwise be simple decision-making. This is particularly the case when intelligence causes investors to form and follow complex strategies or mathematical models that appear to forecast the future, notwithstanding, future cannot be perfectly predicted. At Berkshire Hathaway’s Annual Meeting in 2009, Buffett noted that “emotional stability and inner peace about your decisions” is more important to succeed in markets than outright brilliance. At the same event, Munger – supporting Buffett’s view – drew attention to the role of complex calculations and projections in some of worst business decisions that he had seen, while mocking business schools for teach those methods “because, well, they have to do