What You Need To Know To Invest From Warren Buffett

What You Need To Know To Invest From Warren Buffett’s Famous TV Interview

Warren Buffett’s Rule #1 Of Investing.

When Warren Buffett was 54 years old in the Fall 1984, he had a major television interview with “Adam Smith’s Money World” that aired in 1985. Adam Smith is a pseudonym for George Goodman who was popular for simplifying the complex financial world in his books and TV program.

This famous TV interview summarizes what you need to know to invest from Warren Buffett, the greatest investor of all time. This way you don’t even need to go to business school, just gain business experience to think like a business owner.

If you had invested $10,000 in Berkshire Hathaway in 1965, by 2021 that would be worth $364 million! And while Buffett’s net worth may have been over $500 million in 1985, it grew to over $103 billion by August 2022!

No one else has come close to Warren Buffett and Berkshire Hathaway’s achievements, so I would think we’d be wise to heed Buffett’s simple rules of investing.

Buffett famously said in this interview: “the first rule in investment is don’t lose. And the second rule in investment is don’t forget the first rule. That’s all the rules there are. If you buy things for far below what they’re worth, and you buy a group of them, you basically don’t lose money.”

If investing really is so simple, why do people make it more complicated than it has to be?

Smith asked what is the most important quality for an investment manager, but I think this lesson applies to retail investors as well when Buffett answered: “It’s the temperamental quality not an intellectual quality. You don’t need tons of IQ in this business.”

Buffett continued, “you need a stable personality, a temperament that neither derives great pleasure from being with the crowd or against the crowd because this is not a business where you take polls, it’s a business where you think. Ben Graham would say you’re not right or wrong because a thousand [people] agree or disagree with you.”

In answering what makes Buffett different from 90% of money managers, he responded that “most of the professional investors focus on what the stock is likely to do in the next year” and instead Buffett evaluates business figures which tell him “something about a business but the price of the stock doesn’t tell me anything about a business.”

Warren Buffett was so ahead of his time in working from home (WFH) in Omaha, Nebraska before millennials were even born! He’s proven that doesn’t need to be on Wall Street in New York City to be able to invest well.

You want to evaluate companies and their stocks that are within your circle of competence. We want to figure out what we believe the business is worth, known as its intrinsic value, and then buy it at a margin of safety or discount to this value.

My final takeaway from Buffett is we should all learn how think like business owners because stocks are pieces of businesses that we have the chance to buy and own for a long time. A practical way for us to get experience is either work in retail (especially as an impressionable teenager), start our own businesses, and do anything we can to gain business experience in the real world.

By thinking like business owners, we are closer to thinking and behaving like Warren Buffett and his best friend, Charlie Munger who like to think of themselves as business analysts. By adopting their investment temperament and strategies, hopefully we’ll also become good investors like they are!

If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.

I look forward to making more investor friends! Add me on Insta: michellemarki