Every year, tens of thousands of investors flock to Omaha — and many more tune in around the world – to watch Berkshire Hathaway chairman Warren Buffett field questions from shareholders at his company’s annual meeting.
This year, as ever, Buffett shared his insights not only on the financial fundamentals behind Berkshire’s many subsidiaries and portfolio companies, but also the path to a successful life.
This year’s entire 4-plus-hour affair is worth a watch, listen or read. But without getting into the nitty-gritty, here’s two key pieces of advice Buffett shared on Saturday — one about money, and one about life.
One shareholder asked Buffett about one of the most fundamental decisions any investor can make: when to buy or sell an investment.
The description of the process he and longtime partner Charlie Munger employed offers tremendous insight to his investment philosophy.
“Charlie and I made decisions extremely fast, but in effect after years of thinking about the parameters that would enable us to make the quick decision when it presented itself,” he said.
He didn’t make his sizable investment in Apple, he said, until he felt he had a full grasp of consumer behavior, an understanding he came to after owning several other consumer businesses, both successful and unsuccessful.
After years of gathering intelligence on a particular subject, he said, “there is something that comes along and ticks a whole bunch of observations that you’ve made and knowledge you have, and then crystallizes your thinking into action, big action in the case of Apple.”
The point for investors: Buffett doesn’t buy any investment based on vibes or impulse. Only after he determined that the iPhone was “maybe the greatest product of all time,” did he buy.
Meanwhile, he never worries about missing out on an investment if it involves a product or company that he hasn’t devoted exhaustive research to.
“Charlie and I missed a lot of things … we never worried about missing something that we didn’t understand,” Buffett said.
Shareholders frequently ask Buffett for his musings on a life well lived, but rarely are they quite as straightforward as one question asker this year: “What advice would you like to share today that you believe everyone needs to hear?” she asked.
Buffett echoed guidance from Munger: Think about how you would like your obituary to read, and begin building a life that will get you there.
Buffett noted that those living in present day America have as good a chance at accomplishing this as anyone in world history. “You’re entering the best world that’s ever existed. And you want to find the people to share it with and the activities to participate in that fit you,” he said. “And if you get lucky like Charlie and I did you’ll find things that interest you young. But if you don’t find them right away you keep looking.”
That may require some trial and error, Buffett acknowledged.
“I always tell students, find a job that you would like to have if you didn’t need a job. Sometimes you can find that very early, and sometimes you go through various experiences,” he said. “But don’t forget what you’re actually trying to do.”
Regardless of what tribulations you go through, keeping in mind how you’d like to eventually be remembered is the best way to help you achieve it, Buffett said.
“Expect some difficulties along the way, but if you’re thinking that way, you’re more likely to get there.”
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