Warren Buffett just released his annual letter to shareholders of Berkshire Hathaway. Here 7 powerful lessons every investor can learn from the Oracle of Omaha’s letter.
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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I’m the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
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Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has just released his annual letter to shareholders for the year 2023. As usual, the letter is full of wisdom and insights that can be applied not only to investing but also to life in general. Here are seven powerful lessons from Warren Buffett’s 2023 Berkshire Hathaway Letter:
1. Invest for the long-term
One of the key messages in Buffett’s letter is the importance of investing for the long-term. He highlights the fact that he has held some of his biggest and most successful investments for decades, and that he has no plans to sell them anytime soon. The lesson here is to focus on the long-term potential of your investments, rather than trying to make quick gains in the short-term.
2. Buy quality companies
Another lesson from Buffett’s letter is the importance of buying quality companies. He emphasizes that Berkshire Hathaway only invests in companies that have strong competitive advantages, high returns on capital, and excellent management teams. This means that investors should focus on buying stocks of companies that are likely to be successful in the long-term, rather than trying to pick winners based on short-term performance.
3. Be patient
Buffett is well-known for his patient approach to investing, and this is another lesson that comes through in his 2023 letter. He advises investors to be patient and not to panic when the market goes through periods of volatility. He also stresses the importance of holding onto investments even when they experience short-term losses, as long as you believe in their long-term potential.
4. Focus on value
Buffett has always been a value investor, and this approach is still evident in his latest letter. He emphasizes the importance of buying stocks that are undervalued by the market, and that have strong prospects for growth. This means looking for companies that are trading at a discount to their intrinsic value, rather than simply buying stocks that are popular or in the news.
5. Invest in yourself
Another lesson from Buffett’s letter is the importance of investing in yourself. He highlights the fact that while he has spent a lot of time and effort on his investing career, he has also invested in his personal development by reading and learning about a wide range of topics. This is a reminder that investing in yourself can be just as important as investing in stocks and other assets.
6. Be a contrarian
Buffett has always been a contrarian investor, and this approach is still evident in his latest letter. He advises investors to be willing to go against the crowd and to buy stocks that are out of favor with the market. This can be a difficult strategy to implement, as it requires a strong conviction in your investment thesis, but it can also be very rewarding if you are right.
7. Keep it simple
Finally, Buffett’s 2023 letter is a reminder of the importance of keeping things simple when it comes to investing. He advises investors to focus on a few key stocks that they understand well, rather than trying to invest in a wide range of assets. This can help to reduce the risk of making mistakes and can also make it easier to manage your investments over the long-term.
In conclusion, Warren Buffett’s 2023 Berkshire Hathaway Letter is full of powerful lessons that can be applied not only to investing, but also to life in general. These include investing for the long-term, buying quality companies, being patient, focusing on value, investing in yourself, being a contrarian, and keeping things simple. By following these principles, investors can increase their chances of success and achieve their financial goals over the long-term.
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I first heard of Warren from my finance professor +45 years ago. He spoke of Warren as a financial genius and used him as an example of an investor who uses the fundamental approach to valuing stocks as opposed to the technical approach of valuing stocks. The fundamental approach is a much harder and more diligent approach by analyzing the company, its financials, the industry, the market and its competitors. I have always thought of technical analysis i.e., using graphs, trend lines, moving averages, etc., as a far inferior approach.
Dividends are what got me into investing in the stock market. The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. Have over $600K in my portfolio as I bought a lot of dividend stocks before, I'm buying more now, and I will buy more when it drops further.
I'm not american but I know his blaming sleepy joe biden lol
I have been investing in the stock markets of India for the last 30 plus years & receiving dividends & booking profits is my mantra. Both have kept me alive & left enough funds to manage the remainder, perhaps sufficient funds for the remaining years left of my life. Never lost money in a given year. Not even years 2000-2003, 2008 & 2020. Warren Buffet is of no help to me. In retrospection, I think Peter Lynch makes sense. But future, for sure is going to be different. Nothing lasts forever. Not even long-term investing. Tread cautiously and of course, better be lucky. A portfolio of less than 10 stocks is RISKY still. Maybe 20 is optimum. Who knows! A big one becomes unmanageable & likely contradictory.
Warren and Charlie, the Stetler and Waldorf of finance.
Being successful has taught me that Investing rightly today can save you a whole lot of stress in the nearest future, I pray that anyone who reads this will be successful in life.
It does not pay any dividends … so you are better of owning the DOW ($DIA) and get those dividends and reinvest them
Share buybacks…., well, Buffett didn't go into the specifics of why he thinks those who are 'economic illiterates..'. Really, if he's going to make that kind of accusation, it really needs to backed up by facts. I seem to recall that once upon a time, it was illegal to do share buybacks, because it was viewed as fraud against previous shareholders. I also own some Berkshire shares, the Class B one's….., but not sure I agree with him on this. But, hey….
Biggest lesson i learnt in 2022 in the stock market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.
Yt sux
Thank you. Did Mr. Buffet talk about climate change and we are one catastrophe away from a market crash?
What about Buffets bad investment performance last year??
Wish you would not revisit a letter from Berkshire. We’ve all read it ourselves and you wasted my time with your reading his letter. Don’t get me wrong his letter is very important and informative but you did nothing but got clicks!
Very nice presentation.
New to your channel but really enjoyed your humbleness in your analysis. Subscribed
When are you going to do your blue binder video? We’ve been waiting . . . Thanks
Rob, terrific synopsis on Buffet's letter. The last point to always remain curious and interested in learning, to me also, is critical to keep moving forward. As to the point about taxes, Knowing Buffett he pays every cent that should be paid. Unfortunately, that isn't true for all corporations. Also, the amount the paid by business shouldn't be the measurement. I think what should be compared is the percentage of taxes paid now versus 40 years ago. I believe at some point corporations got congress to change what they were required to pay (tax rate?, write offs?) based on the idea that the people working for businesses were paying taxes and so they shouldn't need to pay so much. But with soaring debt/deficits and the service payments on the debt nearing what we pay for defense, it's unsustainable to continue this way. To me, the debt is a ticking time bomb and must be addressed. Thanks Bob.
What he said is "nothing is forever". Another thing he said is we have billions, YOU don't.
Buffet used to comment that his Secretary paid more in taxes than he did. It seems that he has learned that you don’t win playing the PC game.
Thanks Rob.
timestamps would be a game changer for this channel
Great insight
The BIDEN Administration his selling that "stock buyback" CRAP. Didn't they recently create, or try to create a specific tax on corporations engaged in stock buybacks?
Love my B shares…I bought them in 2021 so I could attend the 2022 Shareholders Meeting. It was a great adventure.
Good video and great take on the Buffet's letter. One thing I found interesting (other than the points noted by the presenter) is that, although Buffet touted the power of compounding dividends and KO and AMEX (and presumably other names in BRK's holdings) in the letter, BRK does not pay dividends. I have always found it interesting that BRK's capital return policy does not seem consistent with Buffet's stated investment philosophy.
At 9:45 shouldn’t $32 billion be $32 trillion?
One of the things Warren has done is use compounding in a different way to most others. What I mean by that is most think of compounding as reinvesting the dividend back into the same share, year after year (notable investors such as Anne Scheiber did just that). What Warren has done for the best part of 30 years with Coca Cola is reinvest Coca Cola's dividend into other shares which has made Coca Cola's dividend compound harder than if it was just reinvested back! It's just mind boggling to think of all the shares Coca Cola's dividend has bought over the years and how many more 'compounding snowballs' have been made because of that.
I'm the same, I've always looked at BRK as a fund with zero fees.
Very sensible and balanced.
I’m also a Berkshire Hathaway shareholder
Thank you ser, very valuable. I am starting a crypto investing fund myself. We already have $10K in treasury.
Buffet talk about 1.2bil investment in Coca Cola, but more important questions how to get this 1.2 billion dollars till Buffet age 64 on time of Coca Cola investment 1994. I don't think anyone can be billioner at age 64 investing in Coca Cola. Also if Buffet put this money in Amazon (founded 1998) he will be twice richer now. All market grow since 1994. And if you just put money in index result will be the same. I don't think anyone who want to make capital should blindly following Buffet current advices. He has wonderful investing advices how to save capital, but if you would like making money you should at least start as Buffet.
Uhhh…. the obvious big difference is that Buffet produces nothing, OF COURSE you're safe to buyback stocks if you don't actually provide a physical product or service. So for BH, yes – go for it. The issue is, most corporations actually have end products, whether it's software, vehicles, grain, oil, etc.
Corporations that have issues that come to light that could have been solved had they taken action bring the spotlight on themselves, and rightly so.
Waiting patiently doesn’t mean being inactive, Warren buys and sells quite frequently
Buy-backs in a capital intensive business is a sell signal.
Great video! VOO has a % allocated to Berkshire
BRK does not pay dividends by his own words the secret sauce. Besides that I really enjoy your analysis and I really enjoy and appreciate Buffett and munger a lot.
32/44 Trillion not billion
Baybacks is not capitalism. Buffet is not right on this
Thank you for the takeaways, Rob. Great vid!
Corporations use whatever means necessary to try and avoid paying taxes. There are accounting loopholes and techniques and if legal, then okay. Not all corps will pay the same % obviously and we want to talk percentages not flat numbers really. Corporations want to max profits and shareholder's wealth. That is the goal. If they do things legally then people shld not complain ab the corps, but complain ab the tax laws.
Thanks for the synopsis. Now, do you own BRK A or B??
only thing which is funny about WB is that he misinterpret meaning of "FAIR"
How FAIR is it that 1 person pays more TAX than other? THATS FAIR? so if thats FAIR why then same person who pays more tax doesnt pay MORE for loaf of bread as he obviously can afford. so FAIR IS TO PAY MORE TAX BUT NOT FAIR IN SAME TIME TO PAY EQUALL AS POOREST for SAME LOAF OF BREAD?
thats completely not logical
I wish Berkshire would pay dividends. Then it would be perfect.