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Warren Buffet Never Took an Emotional Decision In Business: His Tips on Being a Top Investor

"The first rule of investment is don't lose (money). And the second rule of an investment is don't forget the first rule..."

BY SUNAYNA KANJILAL

PUBLISHED JUL 15, 2023

Cover Image Source: Getty Images | Paul Morigi

Warren Buffet, CEO of Berkshire Hathway shared his insights on how he became one of the world's most successful investors during the company's annual shareholder meeting. Buffet is known for his value-oriented investment tactics that include purchasing and keeping a core portfolio of mostly high-valued companies over a long period. He talked about how it's important to stay rational and not let emotions get the best of you as he turned to his partner, Charlie Munger, and asked, "Have we ever made an emotional decision?" to which Munger replied, "No."

Source: GettyImages | Eric Francis Stringer — Image Source: Eric Francis Stringer/Getty Images

"I can't recall any time in the history of Berkshire that we made an emotional decision," Buffett stated. He then clarifies how being a no-emotion person in the business field doesn't mean you have to be a no-emotion person in your personal life. Berkshire has surely benefitted from the rational actions of the leaders as it sits over $740 billion in value as of July 2023, per Yahoo!Finance.

Some of Berkshire Hathway's prominent holdings

1. Apple

This has to be the largest holding of the company valued at a whopping $119 billion as of FY 2022. This takes almost 39% of the company's portfolio, for 5.7% of Apple's outstanding shares. He acquired most of this stake between 2016 and 2019 for around $35 billion, as per CNBC.

2. Bank Of America

The second largest holding of the company has to be the Bank Of America with a stake worth a whopping $34.2 billion as of FY 2022.

3. Chevron

Buffet's third largest holding shares worth $34.2 billion of the oil giant Chevron. Chevron's shares take up 9.7% of Berkshire's portfolio while the stake account for almost 8.5 of the oil company's outstanding shares, as per Yahoo Finance.

4. Coca Cola

Buffet is a big-time Coca-Cola fan so it comes as no surprise that the company has a stake of $25.4 billion which is 8.2% of the company's stock portfolio and accounts for 9.2% of the beverage giant's stock.

5. American Express

Berkshire Hathaway has a $22.4 billion stake in the payments company American Express which accounts for 7.2 % of its portfolio and 19.97% of American Express's outstanding stocks.

Warren Buffet – The Oracle of Omaha

The American investor purchased his first shares at the early age of 11. Buffett was drawn to the world of investments at a tender age and wanted to join the business right after finishing school. Upon his father's convincing, he joined the University of Nebraska from where he graduated and later studied at Columbia Business School where he met Benjamin Graham and David Dodd, both reputed security analysts. Buffett started his career as an investment salesman and joined Graham to form a partnership and started a textile company named Berkshire Hathaway which he later turned into a holding company.

Warren Buffet on Making Money

In 1985, Warren Buffet said, "The first rule of investment is don't lose (money). And the second rule of an investment is don't forget the first rule. And that's all the rules there are." Buffett believes in the School of Value Investing introduced by Benjamin Graham which says to look for securities with prices that are low based on their asset worth. He believes in looking for companies that he feels are undervalued in the market.

Getty Images | Paul Morigi — Image Source: Paul Morigi/Getty Images

What is Warren Buffet's Net Worth?

The American philanthropist has a net worth of a whopping $115 billion. Often hailed the greatest investor of the 20th century, Warren Buffet has made enormous investments in hundreds of companies. Fun Fact: Almost 99% of his wealth was made after the man turned 50.