Warren Buffett is one of the most respected investors in the world. He has shared valuable insights about his investment strategy over the years. In his 2024 annual shareholder letter, Buffett highlighted a key tactic that helps him build wealth.
This tactic can be easily duplicated by individual investors. Berkshire Hathaway, the company Buffett leads, is a massive conglomerate. It has a diverse portfolio that includes subsidiaries in various industries.
These range from furniture and cars to utilities and pipelines. One of Buffett’s standout strategies is his reluctance to sell controlled businesses. He said, “Berkshire almost never sells controlled businesses unless we face what we believe to be unending problems.” This approach is different from the frequent trading seen in Berkshire’s public stock portfolio.
Iconic names like Coca-Cola and American Express are rarely sold. Buffett’s strategy is simple. He aims to benefit from the long-term growth of the businesses he invests in.
Buffett’s long-term investment philosophy
The growth in revenues and businesses of companies like Coca-Cola and American Express ultimately drives earnings and stock prices higher. Buffett believes that average intelligence is enough for investment success.
He thinks the right temperament is more important. Having the fortitude to stick with a good company for the long term, even during market volatility, is key. As Buffett puts it, having the ability to do nothing when everyone else is doing something is a tactic that every investor can use.
However, it may require extra willpower. In summary, Buffett’s approach to investment can be summed up with his “almost never sell” philosophy. By staying invested in well-run, growing companies, you too can capitalize on their long-term growth.
This tactic doesn’t require genius-level intelligence. It just needs the patience and temperament to stay the course. By following Buffett’s lead, individual investors can potentially replicate his remarkable investment success.
His wisdom and strategies continue to guide investors around the world.
Image Credits: Photo by Juan Marin on Unsplash
