Yesterday (August 30), Warren Buffett celebrated his 93rd birthday. As the long-standing chairman and CEO of Berkshire Hathaway, he stands out as one of the most respected figures in the business world today. His straightforward and practical philosophies, along with his impressive track record, have not only earned him admiration but have also motivated countless generations of investors.
Over a span of nearly sixty years, Berkshire Hathaway has consistently achieved annualized returns exceeding 20 percent, a notable achievement when compared to widely recognized benchmarks such as the Dow Jones and S&P 500. This juncture provides an excellent opportunity to reflect on the insightful perspectives Warren Buffett has shared about life and business. These insights can be gleaned from his renowned quotes in interviews and annual shareholder letters, which are considered essential reading for those involved in financial management. Furthermore, it's a moment to anticipate the trajectory of his expansive business empire in the times ahead.
Here are ten of Warren Buffett's quotes that offer inspiration for investment objectives:
"The primary rule of investing is to avoid losses. The secondary rule is to remember the primary rule. These are the only rules." — Excerpt from his 1985 shareholder letter.
"Principles lose their relevance when they become outdated." — Excerpt from his 1988 shareholder letter.
"Purchasing an exceptional company at a reasonable price is preferable to acquiring a reasonable company at an exceptional price." — Excerpt from his 1989 shareholder letter.
"A person's vulnerabilities are revealed when difficulties arise." — Excerpt from his 1993 shareholder letter.
"If we're unable to identify opportunities within our area of expertise, we abstain from expanding that area. Patience is our approach." — Excerpt from his 1995 shareholder letter.
"History teaches us that individuals seldom learn from history's lessons." — Excerpt from his 2004 shareholder letter.
"The least favorable type of business is one that grows rapidly, demands substantial capital for its growth, and yet generates meager or no profit." — Excerpt from his 2007 shareholder letter.
"Price signifies expenditure, while value signifies worth." — Excerpt from his 2008 shareholder letter.
"My purchasing strategy is guided by a simple principle: exhibit caution during times of excessive enthusiasm and seize opportunities during periods of excessive pessimism." — Statement from a 2008 interview with The New York Times.
"Betraying a lack of faith in America rarely yields rewards. While challenges arise, resilience characterizes our nation's journey." — Statement from a 2009 interview with NBC.
Berkshire Hathaway's Strategy for Succession
Warren Buffett has not openly discussed his succession plan in recent years. However, in 2021, his longtime business associate Charlie Munger inadvertently revealed during a shareholder meeting that Greg Abel, who leads Berkshire Hathaway's energy division, would take over as CEO in the event of unforeseen circumstances involving Buffett. Subsequently, Buffett confirmed this plan in an interview with CNBC, stating that Abel would assume the role "tomorrow morning" if necessary.
Buffett also mentioned that if Abel were unable to fulfill the role, Ajit Jain, responsible for overseeing Berkshire's insurance operations, would step in as CEO.
Both Abel, aged 59, and Jain, aged 70, were elevated to the positions of vice chairmen on Berkshire Hathaway's board in 2018. In his 2018 letter to shareholders, Buffett praised them, saying, "Ajit and Greg possess extraordinary talents, and they have Berkshire's values ingrained in them."
In April of this year, Abel accompanied Buffett on a business trip to Japan, during which substantial investments were made in the country's major trading firms. Reflecting on this, Buffett remarked to CNBC, "Abel handles the operational aspects, and I take the credit—I'm getting exactly what I wished for."