Wisdom from Warren

1. Complete the table below.

Quote from Warren Buffett What lesson can you apply to investing?

“only invest in simple businesses that you know and It is easier to evaluate whether a business is valuable and
understand” worthy of investment if you understand what it does.

Buffett is renowned for his disciplined and rational

approach to investing. He separates emotions from
If you are emotional about investment you are not going to
investment decisions, allowing him to stay focused on the
do well
long-term prospects of a business rather than getting
swayed by short-term market fluctuations or sentiments.
Buffett values businesses with strong brands and enduring
competitive advantages. He looks for companies with
You are not buying an asset, you are buying a name,
moats that protect them from competition, providing long-
buying a brand, a franchise
term stability and growth potential.
Integrity is a crucial aspect of Buffett's investing
philosophy. He believes in investing in companies with
Not interested in making money by cheating people
Time – you do not have to be smart, you just have to be
patient
It takes 20 years to build a reputation and 5 minutes to
lose it
Prepare for any eventuality
Lose money for the firm and I will be understanding, if you
do something to lose the reputation of the firm, I will be
ruthless
They do not buy it (the shares) thinking they will sell them
ethical practices and strong management teams,
emphasising honesty and transparency.
Buffett's success is a testament to the power of
compounding and long-term thinking. He understands that
the real wealth is built over time, and he patiently holds
onto his investments, allowing them to grow steadily.
Buffett's stellar reputation and credibility in the financial
world have been built over decades of consistent and
responsible investing. He understands the value of trust
and works diligently to maintain it.
Buffett is known for his emphasis on risk management and
conservative approach to investing. He evaluates potential
risks carefully and prepares for uncertainties, reducing the
chances of significant losses.
Buffett places great importance on reputation, both for
himself and for the companies he invests in. He holds
managers accountable for their actions and expects them
to act in a way that upholds the company's reputation and
integrity.
hold onto them for their lifetime, like they buy a house or a
next week, they think they will hold onto them for their farm":
lifetime, like they buy a house or a farm.
Buffett's long-term perspective sets him apart from many
investors. He invests with the intention of holding onto his
investments indefinitely, allowing the power of
compounding to work in his favour.

At Berkshire, everybody gets the same information Buffett believes in transparency and fairness. At his
including the comprehensive annual report. conglomerate Berkshire Hathaway, he ensures that all
shareholders have equal access to information, promoting
trust and confidence among investors.

2. Using the quotes above, explain why Warren Buffett has proven to be a successful investor (300 words).
Overall, Warren Buffett's success as an investor can be
attributed to his focus on fundamental analysis, patience,
integrity, and a long-term perspective. He has consistently
applied these principles over the years, making him one of the
most respected and successful investors of all time.