Warren Buffett's Investment Strategy and Path to Wealth

Warren Buffett , known as the "Oracle of Omaha," is one of the most successful value investors in the world. As of 2025, his net worth exceeds $150 billion. He has been in charge of Berkshire Hathaway for a long time, bringing shareholders returns far exceeding the market for decades. His success does not come from chasing short-term trends, but is based on value investing, patience and discipline .

Early investment and concept enlightenment

Buffett has been keen on investing since he bought his first stock at the age of 11, and he accumulated his first pot of gold at the age of 14. His real investment philosophy comes from Benjamin Graham, the "father of value investing", who proposed the concepts of intrinsic value and margin of safety in "The Intelligent Investor ". Buffett's early investments focused on undervalued "cigarette butts", but later, under the influence of Charlie Munger, he turned to paying reasonable prices for high-quality companies and looking for companies with "economic moats".

Classic investment case

Buffett's investment masterpieces include:

Coca-Cola (1988) : With its global brand power and continuous cash flow, it has brought tens of billions of dollars in returns over the decades.

GEICO : Invested in it as early as the 1950s and later acquired it in full, becoming Berkshire's cash engine.

Apple (post-2016) : He viewed Apple as a consumer brand with deep customer loyalty rather than a pure technology stock, and the investment became the most profitable single stock in his history.

Through these cases, Buffett proved that " buying good companies at reasonable prices is better than buying bad companies at low prices . "

Buffett's Core Investing Rules

The second rule is to never lose money, and the second rule is to never forget the first rule - capital preservation is the top priority.

Only invest in businesses that you understand and avoid blindly chasing complex industries.

Margin of safety : Buy below the intrinsic value of the company and leave enough risk buffer.

Long-term thinking : The favorite holding period is "forever", giving full play to the power of compound interest.

Contrarian investing : be fearful when others are greedy, and be greedy when others are fearful.

This simple but extremely disciplined rule has resulted in Berkshire's annualized returns of more than 20% since 1965, almost double the S&P 500's return over the same period.

The power of compound interest on wealth

The secret of Buffett's wealth lies not only in stock selection, but also in time and compound interest . He started investing when he was a teenager, and his wealth has been compounded day by day for decades. He once said, "My wealth comes from living in the United States, lucky genes, and the magic of compound interest." What really made him a super-rich person was the persistent compound interest for decades after he turned 50.

Other Masters' Comments

John Clifton Borg, founder of Vanguard Group, once said: "Buffett's greatest advantage is his long-term focus on investor interests rather than market noise ." This coincides with his own philosophy of "low cost, long-term holding." Both of them have proved that financial success does not require complex operations, but adheres to simple and effective principles.

Buffett's practical significance

In this era of information overload and short-term speculation, Buffett's investment method is even more valuable. His strategy tells investors that great investment is not about predicting the future, but about wise layout and patience . No matter how noisy the market is, focusing on the fundamentals and long-term value of the company is the key to crossing the cycle.