Warren Buffett is probably the most famous investor in the world and a great role model for many stockbrokers. With his investment company Berkshire Hathaway, the “Oracle of Omaha” has built a multi-billion dollar empire and made a fortune. The best advice that Buffett says he’s ever received only has something to do with his passion for investing at second glance.
That’s the best advice to Warren Buffett
Although the advice Warren Buffett received dates back more than 40 years, it has not lost its relevance. The star investor betrayed him in the anthology “Getting There: A Book of Mentors”, in which he refers to the media mogul Thomas Murphy, who is described in his essay as his “good friend and hero”:
“He said, ‘Warren, you can always tell someone tomorrow to go to hell.’ […] You didn’t miss the chance. Just forget it for a day. If you feel the same way tomorrow, tell them then – but don’t say it in a moment of anger.”
What Murphy was trying to point out to his friend at the time was probably the need to think things through carefully and not impulsively let emotions guide you, which is especially important in the world of finance. If you lose your temper in the stock market, you run the risk of acting rashly and doing something that you may later regret.
Has Warren Buffett learned from this advice?
Whether or not Warren Buffett took his friend’s advice to heart, he’s probably the most successful investor in the world:
Berkshire Hathaway currently holds investments worth around 250 billion US dollars. In addition, there are 80 companies with approximately 400,000 employees belonging to the investment company and over $130 billion in cash reserves. In 2019, Berkshire Hathaway had sales of $245 billion and total profits of $81.5 billion.
In 1962 no one could have foreseen this, because the company originally known as “Berkshire Cotton Manufacturing” turned out to be one of the biggest mistakes of Buffett’s career. At that time, the investor was still strictly following the guidelines of his mentor Benjamin Graham, who only bought companies that were trading below their book value.
But the star investor’s calculations didn’t work out at Berkshire, so he wanted to return his shares to the then boss of the textile company Seabury Stanton in 1964. However, he changed his offer at the last second, so Buffett angrily set his sights on acquiring a majority stake in Berkshire in order to fire Stanton.
Today, Berkshire Hathaway is one of the world’s most successful companies. Although Buffett maintained the textile business for around 20 years, he then increasingly concentrated on other areas.
As you can see from Buffett’s career, even billionaire businessmen are not immune to mistakes. The trick is to learn from your mistakes in order to be able to avoid them when making later decisions.
Felix Spies / Editor finanzen.net
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