Simple, Steady, Successful: Buffett’s Way

Peter Hafner |
Categories
Retirement
Investing

Early Lessons in Patience

Warren Buffett bought his first stock at age 11—three shares of Cities Service for $38 each. When the price rose slightly, he sold for a small profit. Then he watched the stock climb even higher. It was a defining lesson: patience pays.


A New Chapter at 94

At Berkshire Hathaway’s annual meeting, Buffett announced he’ll step down as CEO at year’s end but remain chairman. At 94, he joked, “I’m not going to sit at home and watch soap operas,” but acknowledged it’s time for fresh leadership. His thoughtful succession plan is a masterclass in knowing when to lead—and when to let go.


The Power of Staying Put

Known as the “Oracle of Omaha,” Buffett champions long-term investing. He discourages frequent trading and urges investors to stick with great companies for the long haul.

“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

Buffett’s simple approach—buy quality and hold—is a timeless guide for investors big and small.


Results That Speak Volumes

Since 1965, Berkshire Hathaway has returned 19.9% annually—compared to 10.4% for the S&P 500. That’s a 5.5 million percent cumulative gain versus 39,000% for the index. Impressive as that is, it also underscores the value of staying invested in a diversified portfolio.


Buffett’s Core Principles for Financial Success
  1. Invest in What You Know
    Stick to industries, companies, or funds you understand. This reduces risk and improves confidence in your decisions.
     
  2. Ignore the Noise
    Headlines and market swings can spark emotional decisions. Buffett sees volatility as opportunity—not danger. Long-term fundamentals matter most.
     
  3. Stay the Course
    Don’t chase trends or panic during downturns. Buffett values emotional discipline over reactionary moves. As recent April volatility reminded us, markets recover.
     
  4. Let Compounding Work
    Reinvesting dividends can significantly grow wealth over time. Buffett credits compounding as a key to his success.
     
  5. Keep Costs Low
    Low-cost index funds remain powerful tools for long-term growth—offering broad market exposure with minimal fees.


Buffett has held U.S. equities since his first purchase in 1942—when the Dow fell below 100. He still believes in the American economy’s strength and the value of disciplined investing.

“America would have done fine without Berkshire. The reverse is not true.”

Buffett’s way is simple. It’s steady. And for those who stay the course, it can be incredibly successful.

Sources:

  1. Wall Street Journal: https://www.wsj.com/business/warren-buffett-reveals-he-stepped-down-after-finally-feeling-his-age-b060251f
  2. Berkshire Hathaway Inc.: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.berkshirehathaway.com/letters/2024ltr.pdf
  3. Charlie Munger – The Architect of Berkshire Hathaway: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.berkshirehathaway.com/letters/2023ltr.pdf
  4. Berkshire’s Performance vs. the S&P500: chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.berkshirehathaway.com/letters/2022ltr.pdf