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@ Henrik Ekenberg
2025-02-21 15:08:49
**Buffett's Advice to Investing Students: Timeless Wisdom from the Oracle of Omaha**
Warren Buffett, one of the greatest investors of all time, offers invaluable insights not only on investing but also on life, business, and society. Below are highlights of his advice and observations—each infused with his signature wit and practical wisdom.
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**1. On Investing: The Power of a Few Good Ideas**
_"If you have ten good ideas in the rest of your life, you can afford to give away five of them. You'll get very rich with a very few good ideas."_
**Lesson:**
Investing success doesn't require constant activity or countless ideas. A few high-conviction investments can yield extraordinary results. Focus on quality over quantity and wait for outstanding opportunities.
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**2. On Hiring the Right People**
_"The good news is, I did not ask them their grades in business school. The bad news, of course, is I didn't ask them if they'd been to business school at all."_
**Lesson:**
Credentials matter less than character, curiosity, and critical thinking. Look for people who deliver results, regardless of their formal education or background.
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**3. On the Airline Industry**
_"If there had been a capitalist down there (at Kitty Hawk), the guy should have shot down Wilbur."_
**Lesson:**
Some industries are structurally challenging and may not consistently generate shareholder profits. Understand the underlying economics before investing, even if the industry seems revolutionary.
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**4. On Running Great Businesses**
_"Peter Lynch has always said buy a business that's so good that any idiot can run it, because, sooner or later, one will."_
**Lesson:**
Invest in companies with strong fundamentals and durable competitive advantages. A great business thrives on its intrinsic qualities—not solely on exceptional management.
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**5. On When to Sell a Stock**
_"To sell off something that is really a wonderful business just because the price looks a little high, or something like that, it's almost always a mistake."_
**Lesson:**
Selling a quality business based solely on valuation often means missing out on long-term compounding. If the economics remain strong, holding on is usually the wiser choice.
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**6. On Banking Consolidation**
_"I think probably the acquired bank's shareholders are going to be a little luckier than the acquiring bank's shareholders."_
**Lesson:**
In mergers and acquisitions, the shareholders of the acquired company may benefit more. Exercise caution when investing in companies that frequently acquire others.
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**7. On Financial Writing and Clarity**
_"If you understand an idea, you can express it so other people understand it."_
**Lesson:**
Writing forces clarity of thought. If you struggle to explain an idea simply, you might not fully understand it yourself. Clear communication is vital in business, investing, and life.
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**8. On Inherited Wealth**
_"Inherited wealth is really just a lifetime supply of food stamps, given through a trust officer instead of a welfare officer."_
**Lesson:**
Relying on inherited wealth can foster dependency. Cultivate self-reliance and pursue personal achievement, even in affluent circles.
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**9. On the World's System of Rewards**
_"I work in a market system that happens to reward what I do very well, disproportionately well."_
**Lesson:**
Society rewards certain skills—like investing or sports—disproportionately compared to others such as teaching or nursing. Recognize these imbalances and consider giving back when you benefit.
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**Conclusion: Timeless Principles for Success**
Buffett's advice reminds us that success in investing and life requires patience, clarity, and humility. Embrace quality over quantity, strive for clear understanding, and acknowledge the broader impact of your success.
**Take these lessons to heart:**
- **Focus on quality over quantity.**
- **Prioritize clarity and understanding.**
- **Contribute to society where you can.**
Buffett's wisdom is simple yet profound—just like the man himself.
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