Introduction to Great Investors: Warren Buffett

Warren Buffett is widely regarded as the world’s most successful investor, and it is no mistake we have repeatedly echoed his wisdom throughout the years. The book value of his company, Berkshire Hathaway (BRK.B), compounded at 18.3% per year between 1965 and 2022. That is nearly double the 9.9% pretax return to the S&P 500 over the same period. According to Forbes, Buffett is among the world’s richest men, with a net worth in the tens of billions of dollars at this writing. But he didn’t stumble across a giant oil field, develop software, or inherit wealth. Rather, he built his fortune solely through astute investing. Aspiring investors, then, will certainly benefit by studying his methods. Fortunately, Buffett has been forthcoming.

In Berkshire’s 1977 annual report, Buffett described the central principles of his investment strategy:

"We select our marketable equity securities in much the way we would evaluate a business for acquisition in its entirety. We want the business to be one (a) that we can understand; (b) with favorable long-term prospects; (c) operated by honest and competent people; and (d) available at a very attractive price."