Warren Buffett is considered a national treasure for his remarkable investment success since 1965, delivering a compound annual return of 19.8% with Berkshire Hathaway. His approach to investing involves finding businesses he likes, buying into them, and holding them ideally forever. However, his success also stems from his understanding of consumer behavior, which he uses to guide many of his investment decisions.
At Berkshire Hathaway’s recent shareholder meeting, Buffett discussed some of his largest holdings, including Apple, which now represents 43.3% of Berkshire’s stock portfolio. He emphasized the importance of psychology in investing decisions, citing examples of how he has learned about consumer behavior through past investments in companies like See’s Candies and GEICO. His intuitive understanding of consumer preferences has played a significant role in his investment success.
In terms of current investments, Buffett mentioned that Berkshire Hathaway had trimmed its Apple holdings but still views it as one of its largest common stock holdings. He emphasized the importance of viewing stocks as businesses and not trying to predict market movements. Buffett also addressed the impact of historically low corporate tax rates on his investment decisions and expressed his willingness to pay substantial federal income taxes.
When asked about the possibility of investing in companies based in China and Hong Kong, Buffett emphasized that Berkshire Hathaway’s primary focus will always be in the United States. He highlighted the success of their investments in Japan and expressed confidence in the opportunities available in the U.S. market. Buffett also discussed the potential impact of artificial intelligence on the investment world, drawing parallels to the development of nuclear weapons.
Reflecting on his partnership with Charlie Munger, Buffett shared fond memories of their time together and expressed gratitude for having had such a close and fruitful relationship. He commended Berkshire shareholders for their philanthropic contributions and the impact they have made on society. Buffett praised the generosity and selflessness of Berkshire shareholders who have deferred their own consumption to help others, highlighting their significant contributions to various charitable causes.
In conclusion, Warren Buffett’s investment success is not just a result of his financial acumen but also his deep understanding of consumer behavior. Through intuitive decision-making and a focus on long-term value investing, Buffett has created staggering wealth for himself and thousands of Berkshire Hathaway shareholders. His commitment to philanthropy and dedication to giving back to society reflect his values and principles as an investor and a businessman.
