Investment Lessons I Learned From Warren Buffet

Investment Lessons I Learned From Warren Buffet

Warren Buffet is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world and is often referred to as the "Oracle of Omaha" for his ability to identify undervalued companies and make successful investment decisions. Mr. buffet is the chairman and largest shareholder of Berkshire Hathaway, a conglomerate holding company with a diverse range of businesses, including insurance, railroads, and retail. Buffet is known for his value investing approach, which involves looking for undervalued companies with strong financial performance and a competitive advantage in their industry. In addition to his successful business career, Buffet is also a philanthropist and has pledged to give away 99% of his wealth to charitable causes. 


I have learned a lot from Warren Buffet. I am sharing a few insights that I have tried to apply in my own life.


  1. Look for undervalued assets: Buffet often looks for opportunities to buy assets that are undervalued by the market.

  2. Invest in what you understand: Buffet advises investors to focus on industries and companies that they understand and have a good grasp of their business models and prospects.

  3. Diversify your portfolio: Buffet advises investors to diversify their portfolios to spread risk and increase their chances of success.

  4. Avoid excessive debt: Buffet advises against taking on too much debt, as it can be risky and can limit an investor's flexibility.

  5. Focus on the fundamentals: Buffet emphasizes the importance of looking at the underlying financial performance of a company, rather than getting caught up in short-term market fluctuations.

  6. Have patience: Buffet advises investors to be patient and not make impulsive decisions based on short-term market movements.

  7. Don't try to time the market: Buffet advises against trying to predict the ups and downs of the market, as it is difficult to accurately forecast short-term movements.

  8. Invest in companies with strong, consistent performance: Buffet looks for companies with a track record of strong financial performance and a competitive advantage in their industry.

  9. Don't let fear or greed drive your decisions: Buffet advises investors to stay disciplined and avoid letting their emotions influence their decisions.

  10. Do your own research: Buffet advises investors to do their own research and not blindly follow the advice of others.

  11. Focus on the long term: Buffet emphasizes the importance of a long-term perspective, as he believes that the market will ultimately trend upwards over time.


His one-liners are full of investment wisdom. Here are some of my favorites.


  1. "Rule No.1: Never lose money. Rule No.2: Never forget Rule No.1."

  2. "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

  3. "Price is what you pay. Value is what you get."

  4. "The most important quality for an investor is temperament, not intellect."

  5. "I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years."

  6. "The stock market is a device for transferring money from the impatient to the patient."

  7. "The difference between successful people and really successful people is that really successful people say no to almost everything."

  8. "If you don't find a way to make money while you sleep, you will work until you die."

  9. "Risk comes from not knowing what you're doing."

  10. "Chains of habit are too light to be felt until they are too heavy to be broken."


For example


 Let's take a look at this quote, "If you don't find a way to make money while you sleep, you will work until you die."


He is referring to making a passive income that is earned with little or no ongoing effort, such as rental income or income from dividends or interest. By finding ways to generate passive income, an individual can potentially increase their income without the need to continually work for it. This can provide more financial security and freedom, as the individual will have a source of income even if they are unable to work or choose to retire. There are many different ways to generate passive income, such as investing in real estate, stocks, or a small business, or by creating and selling a product or service that requires minimal ongoing effort. By identifying opportunities for passive income and taking advantage of them, an individual may be able to increase their income and financial stability. 


"The most important quality for an investor is temperament, not intellect" suggests that having the right mindset and approach to investing is more important than having a high level of intelligence or knowledge. Buffet believes that having a temperament that allows an investor to stay calm and rational, even in times of market volatility or uncertainty, is a key factor in making successful investment decisions.


One aspect of temperament that Buffet emphasizes is the ability to resist the urge to follow the crowd or act on short-term market fluctuations. He advises investors to focus on the long-term prospects of a company and its underlying financial performance, rather than getting caught up in the noise of the market.



Overall, Buffet's quote suggests that having the right mindset and approach to investing can be a key factor in achieving financial success. By following these lessons, investors may be able to make more informed and strategic investment decisions and potentially improve their financial success.