If you were to make a list of the greatest investors of all time, Warren Buffett would either be at or very near the top of that list. Yet look at this chart showing a five-year window when an investor in Buffett's Berkshire Hathaway would have been better off owning an S&P 500 index fund instead. That's right. Even Buffett -- one of the greatest investors of all time -- fell behind the overall market for a five-year period.

Five years is generally considered to be a decent amount of time to judge an investor's performance. If you'd looked at Buffett through the blinders of those five years, you might mistakenly conclude that he's merely average.

But you'd be wrong.

So what?
Buffett follows the very successful value-investing strategy. It's the only one with nearly a century of evidence pointing to its ability to reliably beat the market over long periods of time. Yet when you see that even a market-trouncing value-investing master like Buffett can fall behind over a five-year period, you come to understand that you need two traits in addition to investing smarts:

  • Confidence.
  • Patience.

With a healthy dose of each, you, too, can weather downturns and make a fortune beating the market.

Having confidence means having faith in your opinions. As Buffett himself has said: "You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right -- and that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else."

See, companies usually become value-priced because something looks wrong with them. If you buy, you need to be confident in your decision to weather near-term volatility. What's more, if a stock you buy falls further, the confident value investor can do the one thing that ensures even better returns: Buy more.

Having patience means avoiding the urge to make things happen. As Buffett noted: "We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."  

It's precisely that attitude that has let Buffett trounce the market over a lifetime, even in spite of falling behind a raging bull market for a few years.

Stay within your comfort zone
Now, you don't need to venture out into the unknown reaches of the market to be a successful value investor. That sure helps when the market throws your holdings for a loop. In fact, check out some of the very well-known companies that Buffett's Berkshire Hathaway owns in its market-beating investing portfolio:

United Parcel Service (NYSE:UPS)

Lowe's (NYSE:LOW)


Bank of America (NYSE:BAC)


Wal-Mart (NYSE:WMT)

American Express (NYSE:AXP)

At Motley Fool Inside Value, we understand that true investing wealth is built over time, through the power of confident patience. If you're ready to follow in the footsteps of great value investors like Buffett, join us free for 30 days. There is no obligation to subscribe.

At the time of publication, Fool contributor and Inside Value team member Chuck Saletta owned shares of Lowe's and Bank of America. Wal-Mart and Berkshire Hathaway are Inside Value selections. UPS and Bank of America are Income Investor stocks. Berkshire and Costco are Stock Advisor picks. The Motley Fool holds stock in Berkshire Hathaway. The Fool has a disclosure policy.