The Oracle of Omaha: Warren Buffett reveals his secret to success

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• Warren Buffet is the fifth richest person in the world
• Not all of Buffett’s investments have been successful
• It only takes a few winners to work miracles

The Oracle of Omaha

Warren Buffett is one of the most successful investors in the world and is also known as the “Oracle of Omaha”. The American bought his first share at the age of eleven, and his first tax return followed at the age of 13, as Forbes reports. He is now one of the richest people in the world and is also CEO of Berkshire Hathaway. However, in addition to his investment flair, he is also known for his charity work. He has already donated several billion US dollars, mainly to the Gates Foundation and his children’s foundations. In 2010 he called and Bill Gates also launched the Giving Pledge, which requires billionaires to give at least half of their wealth to charity. Forbes currently ranks him as the 5th richest person in the world with a fortune of $109.7 billion. He also has a self-made score of eight and a philanthropy score of five.

Not always successful

Considering the star investor’s track record, one might think that Buffett consistently chooses only successful companies to invest in. However, as he explains in his annual letter to shareholders, things are not quite that simple. “In the 58 years that I’ve run Berkshire, most of my capital allocation decisions have been no better than so-so. In some cases, poor decisions have also been salvaged by a great deal of luck on my part,” said the Oracle of Omaha. “I’ve made many mistakes over the years. As a result, our extensive collection of companies currently consists of a few companies that are truly exceptionally economical, many that have very good economic characteristics, and a large group that is marginal.” He also acknowledges that some of his investments have failed over time. “Other companies I’ve invested in have died, their products unwanted by the public,” he writes.

The recipe for success

So what gives the investor his great success? “Our satisfying results are the result of about a dozen really good decisions — that would be about one every five years — and a sometimes forgotten advantage that favors long-term investors like Berkshire,” Buffett said. While some investments in his long-running career fell through, others proved to be groundbreaking successes. In August 1994, for example, Berkshire completed its seven-year purchase of the 400 million shares of Coca-Cola that the holding company still owns today. By 2022, the investment’s dividend should increase from $75 million to $704 million. “Growth happened every year, sure as birthdays. Anything Charlie [Munger] and I had to do was cash Coke’s quarterly dividend checks. We assume that there is a high probability that these checks will grow,” said Buffett. The investment in American Express also brought similar success. “The lesson for investors: the weeds wither as the flowers bloom. Over time, it only takes a few winners to work wonders. And yes, it helps to start early and live into your 90s,” he wrote.

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