How to Win Like Warren Buffett

August 14, 2018
James Whittaker
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“It is not necessary to do extraordinary things to get extraordinary results.”

Warren Buffett

Two things make sensational news headlines more quickly and prominently than anything else: first, trouble in financial markets, which impact people’s investments and retirement savings; and second, the prospect of war.

As news outlets splash doomsday headlines as boldly as they can, many buy into the hype, acting as willing participants in spreading fear to anyone who will listen — and the poverty consciousness grows like a weed.

But not everyone buys into the hysteria. Some remain focused on what they want to achieve, ignoring what is out of their control, and in doing so can stumble across opportunities that others only dream of.

During the US Savings and Loan Crisis of the 1980s and 1990s, interest rates were raised to curb inflation and numerous financial institutions sought deregulation to enable them to innovate—their very survival depended on it. As financial companies struggled, bank stock prices were hammered, including the stock of Wells Fargo, which plummeted almost 50%.

One investor, Warren Buffett—who was then in his fifties, and known for his keen sense of rationality—decided to investigate the intrinsic value of these companies himself, rather than reacting to everyone else’s fear.

At the time, Wells Fargo’s market capitalization was around $2.9 billion. Through his research Buffett concluded that the company would not only survive the crisis and return to its former but might one day even surpass it. Buffett backed his judgment and bought a significant stake in the renowned US bank.

His analysis and instincts were correct. Today, Wells Fargo boasts a market capitalization of more than $270 billion, giving Buffett a return of over 9,000%on his investment.

In a 2004 letter to his Berkshire Hathaway shareholders, the legendary investor offered an insight into how he feels about how most people think: “Be fearful when others are greedy and greedy when others are fearful.”

With each downturn, recession or financial crisis, Buffett does not throw up his hands in despair or cower under his desk. Rather, he views it as an opportunity to consolidate his wealth, buying deeply undervalued companies and setting up operational efficiencies and synergies that lead to enormous returns over time.

Those who are well advanced on the path to self-mastery, like Warren Buffett, are NOT extraordinary people. Instead, they consistently and purposefully apply a proven formula of simple actions that lead to extraordinary achievement over time—starting with getting crystal clear on what they want.

While others drift with whatever gust comes their way, winners use their calm, focused minds to identify and take advantage of opportunities to achieve their goals faster.

On 30 August, Buffett turns 88. Happy birthday to one of the greats of our time.

Onwards and upwards always,
James W.

PS – With USD $30+ billion donated, Warren Buffett is also regarded as the second greatest philanthropist of all time.

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Famous quotes by Warren Buffett

  • “It is not necessary to do extraordinary things to get extraordinary results.”
  • “Surround yourself with people who are better than you.”
  • “Someone’s sitting in the shade today because they planted a tree a long time ago.”
  • “Successful investing takes time, discipline and patience. No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
  • “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
  • “I just sit in my office and read all day.”
  • “You only find out who is swimming naked when the tide goes out.”
  • “Be fearful when others are greedy, and greedy when others are fearful.”
  • “If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.”
  • “What we learn from history is that people don’t learn from history.”
  • “I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate’s distribution of long straws is wildly capricious.”
  • “Too often, a vast collection of possessions ends up possessing its owner.”
  • “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.”
  • “Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
  • “The asset I most value, aside from health, is interesting, diverse, and long-standing friends.”
  • “A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check.”
  • “I always knew I was going to be rich. I don’t think I ever doubted it for a minute.”
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