1 Reason Warren Buffett Is Rich and You Aren't

Live from the 2014 Berkshire Hathaway annual shareholder meeting!

May 3, 2014 at 3:01PM


We're coming to you live from the 2014 Berkshire Hathaway (NYSE:BRK-B) (NYSE:BRK-A) annual shareholder meeting in Omaha, Nebraska. We are transcribing the famous Buffett and Munger Q&A and live chatting with Fools around the globe! Click HERE to access this free live chat!

Everyone knows when it comes to investing wisdom, nobody beats Warren Buffett.

During the day-long Berkshire Hathaway annual meeting, Buffett and his long-time partner Charlie Munger field questions from dozens of shareholders.

Despite the public perception that Buffett is a "stock-picker," the majority of the day's discussion actually surrounds Berkshire Hathaway's operating businesses like GEICO, Berkshire Hathaway Energy, and BNSF. But Warren Buffett still managed to provide some investing wisdom and display one of his best qualities: Self-awareness.

Don't time it
It's tempting to try and "time" the stock market and purchase shares at the lowest possible point. History tells us doing this is extremely dangerous. Warren Buffett doesn't do it, and neither should you.

A shareholder asked Buffett if he regretted not plowing all of the Berkshire's expendable cash into his favorite stocks at the bottom of the market in the spring of 2009 -- as opposed to striking preferred stock deals.

Buffett quickly admitted that would have been the ideal move, but he and Charlie "have never figured out how to do that and never will."


Think about that for a second.

Warren Buffett, the most successful long-term investor of all-time, just admitted that he will never figure out how to determine the absolute "bottom" of the stock market during a downturn.

During the financial crisis downturn, Buffett and Berkshire made of the majority of their deals in the fall of 2008, held onto some cash, and stomached the paper losses as the market marched lower. Some would say Buffett missed a huge opportunity by not plowing the rest of the cash into the market in March 2009. 

He disagrees. Because Berkshire hadn't tied up all of its capital in stocks, the company was able to purchase BNSF in the fall of 2009 -- an acquisition he calls an "enormous part of [Berkshire's] future.

The lesson
This is just one example of how Buffett's self-awareness helps him make good decisions. Buffett knows he's a super-investor, but he also knows his limitations. In an industry (investing) where over-confidence will garner short-term attention, Buffett understands if he steps out of his "circle of competence," he will get burned.

Individual investors should try and understand what they need to do to be successful.

If you buy and hold index funds, don't deviate from that process when you're tempted to buy the "hot stock" that your co-worker has already made 245% on. If you're a bottoms-up stock investor, don't try and "trade the Fed" or time the gold market.

Warren Buffett knows he's not a market-timer. Do you know what you are?

Join our live chat now!

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David Hanson owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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