Warren Buffett’s timeless investment principles studied

Warren Buffett has been one of the most successful investors for decades. His advice is simple but powerful. Invest in stocks you would be happy to hold for 10 years, even if the market shut down. Buffett’s company, Berkshire Hathaway, has generated nearly 20% annualized returns from 1965 to 2023. This is double the S&P 500’s 10.2% return over the same period. Buffett sees market downturns as opportunities to buy more shares of great companies at a discount. He focuses on a stock’s future potential, not its current price. “Price is what you pay; value is what you get,” Buffett often says. He looks for undervalued businesses with long-term growth potential and consistent profits. Buffett’s emotional discipline allows him to avoid panic selling during market turmoil.

Buffett’s long-term investment strategy

In March 2024, he waited for the ideal moment to invest while others sold off stocks. Buffett’s long-term investments in Coca-Cola and American Express illustrate his patience. Berkshire has held these positions for over 20 years. In 2023, Berkshire did not buy or sell a single share of either company. Yet, both Coke and AMEX rewarded this inaction by increasing their earnings and dividends. Buffett also highlights the value of share repurchases. When Berkshire buys back its own stock, it increases each shareholder’s ownership stake in all of Berkshire’s assets. The key lesson from Buffett is to stick with great businesses. One great company can make up for many mediocre investment decisions. By focusing on quality and maintaining a long-term perspective, investors can successfully navigate uncertain markets.