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3 investment tips from Warren Buffett to Berkshire Hathaway shareholders

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3 investment tips from Warren Buffett to Berkshire Hathaway shareholders

Warren Buffett in his 2024 letter to Berkshire Hathaway shareholders offered key pieces of investment advice for those looking to grow their wealth.

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Warren Buffett released his annual letter to Berkshire Hathaway shareholders on Saturday.

In this letter, the billionaire offers several pieces of advice for investors.

He advises thinking long-term and ignoring the financial forecasts of experts.

This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.

Warren Buffett has his on Saturday Annual letter to Berkshire Hathaway shareholders published in which he gives subtle investment tips to readers who want to increase their wealth in the same way as the billionaire.

Since 1965, Buffett has written an annual letter analyzing the performance of the holding company’s investments and presenting his observations on financial trends and pitfalls.

Over the years he has also given advice on how the Wall Street Journal in an analysis of each of his letters. So he warned investors of fast-growing companies, which he called “the worst kind of companies,” and described fear and greed as two inevitable “super-contagious diseases” plaguing the investing community. Buffett suggested in 1987 that savvy investors should try to reverse the two diseases, writing: “We simply try to be fearful when others are greedy and to be greedy only when others are fearful. “

In his this year Brief Buffett advises investors the following:

Ignore the experts, always

Buffett begins by praising his sister Bertie, whom he describes as extremely well-read and familiar with many accounting terms, even though she is by no means an economics expert or has prepared for an audit. Her instinct is his first important advice.

He writes: “She is sensible – very sensible – and instinctively knows that they are experts always should ignore. Because if she could reliably predict tomorrow’s winners, would it then voluntarily pass on its valuable insights and thereby increase the competitors’ willingness to buy? That would be like finding gold and then giving your neighbors a map showing where it was found.

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Be patient when you find a wonderful company

Buffett then discusses some of Berkshire’s investment successes achieved through long-term fractional holdings: American Express and Coca-Cola, which began operations in 1850 and 1886, respectively.

Berkshire Hathaway made significant investments in Coca-Cola in 1988 and American Express in 2001, which, according to Buffett, remained untouched in the following decades, although both companies experienced occasional failed expansion attempts and moments of mismanagement.

“The lesson of Coke and AMEX? If you find a really great company, you should stick with it,” writes Buffett, “patience “It pays off, and a great company can make up for the many mediocre decisions that are inevitable.”

Never risk a permanent loss of capital

Buffett goes on to say that the stock market is becoming more and more like a casino, with daily temptations long-term investment strategy to ignore and quickly turn over one’s holdings when “feverish activity” brings all sorts of uninformed or malicious actors onto the scene.

He writes: “In times like these becomes Any stupidity that can be marketed is marketed vigorously – not by everyone, but always by someone.”

He notes that one should not fall for the marketing of stupidity, otherwise the scene could turn ugly and the average investor could be left “confused, poorer and sometimes vindictive.”

„Eine Investment rule at Berkshire has not changed and will not change: Never risk a permanent loss of capital. Thanks to American tailwinds and the power of compound interest, the arena in which we operate has been – and will continue to be – worthwhile if you make a few good decisions throughout your life and avoids serious mistakes.“

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