Warren Buffett Turns 94 as Berkshire Hathaway Reaches $1 Trillion

Warren Buffett, the Oracle of Omaha and the CEO of Berkshire Hathaway, turned 94 on Friday. His presence is taken for granted, as during our lifetime, he’s always been around to guide us through economic ups and downs.

He won’t always be here, so we should appreciate the Oracle’s wisdom while he’s still with us. As you may be aware, Charlie Munger, Buffett’s investing partner at Berkshire Hathaway, passed away not long ago.

Buffett’s classic quotes are numerous, but one of them applies to the current state of the financial markets. “Charlie and I missed a lot of things… and what we really regretted was missing something that turned out to be very big. But we never worried about missing something that we didn’t understand,” Buffett mused after Munger’s passing.

This is particularly relevant during a time when so many amateur traders are piling into artificial intelligence (AI) stocks. You can bet your bottom dollar that most of them have little to no understand of what AI actually does and doesn’t do.

Buffett’s investment principles might not offer thrills and immediate gratification to new stock traders. However, they can’t argue with Buffett’s track record. His net worth totals $148 billion, making Buffett the sixth-richest person in the world.

Another testament to Buffett’s prowess is Berkshire Hathaway’s long-term growth trajectory. Around the same time that Buffett turned 94, Berkshire became the first non-technology company to achieve a $1 trillion market capitalization.

Courtesy: CNBC

As you can see, folks who simply bought and held Berkshire Hathaway shares fared quite well over the long run. The chart starkly displays the benefits of owning “forever stocks” representing great, well-researched businesses.

Thus, there’s no real secret to the “secret sauce” of Buffett’s success as an investor. Oaktree Capital Management founder Howard Marks (another legendary financier) explained, “It’s been a matter of a well-thought-out strategy prosecuted for seven decades with discipline, consistency and unusual insight.”

Moreover, Buffett’s success demonstrates the “power of compounding at a very high rate for a very long period of time, uninterrupted,” Marks observes. Marks also noted that Buffett “never took a leave of absence.”

Another Buffett quote encapsulates the timelessness of his investment philosophy. “I mean, you have to buy businesses, or little pieces of businesses called stocks. And you have to buy them at attractive prices and you have to buy into good businesses, and that advice will be the same 100 years from now in terms of investing,” Buffett stated.

That’s a concept you can take with you even after Buffett passes away someday. Really, there’s enough collective wisdom from Buffett to last for a lifetime, if you’re willing to actually apply it.

But therein lies the problem: too many traders churn through stocks in search of the latest shiny metal object. They’d rather trade in and out of stocks constantly, hoping to beat Buffett and Berkshire’s track record.

Yet, they’ll just end up underperforming Buffett unless they happen to get really lucky. For example, perhaps a handful of investors purchased Bitcoin when it was much cheaper and held it for life-changing gains.

Courtesy: BarChart

Investors who have bought and held gold have also done well just by sitting on their positions. Gold recently hit a fresh all-time high against the U.S. dollar, which speaks volumes about the relative value of hard assets versus government money.

This suggests that Buffett used the passage of time as a major magnifier of wealth, and perhaps you should consider adopting this strategy, as well. When you’re invested in high-conviction assets, time will usually heal all wounds and rectify all price dislocations.

Finally, we can consider the insights of Check Capital Management founder Steve Check, who called Buffett the “most patient investor ever.” This attribute, Check claims, is a “big reason for his success.”

This, then, is fundamentally what separates Buffett from most humans. As Check put it, Buffett “can sit and sit and sit. Even at his age where there’s not that much time left to sit, he’ll still sit until he feels comfortable. I just think he’ll just keep doing as best he can right to the end.”