The Warren Buffett Blueprint
- Doug Oosterhart, CFP®
- May 30
- 3 min read
Aside from the continued news on tariffs over the past couple of weeks, the major news in the business world is that Warren Buffett has decided to step down as CEO of Berkshire Hathaway at the end of 2025 [1].
Retiring at the age of 94, after buying his first stock at age 11, Buffett has been investing for 83 years.
While many have tried (unsuccessfully) to replicate his approach to stock picking, there are several key ideas that Buffett has consistently reiterated throughout his lengthy career that we can successfully copy.
Today, I’d like to share four of these ideas, as they provide valuable support for our own investment philosophy. Mr. Buffett's willingness to repeatedly emphasize these ideas speaks to their importance, and since repetition is the key to all learning, I have tried to follow his lead by sharing these same ideas (amongst others) within these notes and in our meetings. Let’s get to it…
Equities Are Buffett’s Primary Choice for Long-Term Investors
It's well known that Buffett’s long-term track record stems from investing most of his money in the world's great companies. Over Buffett’s 80 years of investing, that preference has never wavered, and he reiterated that equities remain his preferred choice in his recently published 2024 shareholder letter [2] when he said,
"Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change."
Beyond this simple statement, Buffett provided a deeper look into the logic behind why equities have been his lifelong preferred investment vehicle in his 2011 shareholder letter [3], which is well worth the time for those interested.
Ignore ALL Market Forecasts
During the 1999 shareholder meeting [4], Buffett acknowledged that,
"We have no idea whether the market is going to go up today, next week, next month, or next year…I know of no one who has been successful and really made a lot of money predicting the actions of the market itself."
It’s fascinating to me that Buffett has said many times that he has no idea what will happen next in the market, and yet, forecasts of all types make up an inordinate amount of financial media coverage. Considering this disconnect, we should routinely ask ourselves: If Warren Buffett doesn’t know what the market will do next, how likely is it that some media pundit will be right about the future?
Volatility is the Friend of Long-Term Investors
While many investors fear market volatility, Buffett has long counseled investors to use market declines to their advantage. Almost comically, Buffett said in a 2012 shareholder meeting that[4],
“The beauty of stocks is they do sell at silly prices from time to time. That’s how Charlie and I have gotten rich.”
Throughout Buffett’s lifetime, he has continually noted that market declines have historically presented long-term investors with an opportunity to purchase additional shares at temporarily discounted prices (e.g., “... be greedy when others are fearful” [5]). This decade, in addition to the last 100 years, has been an incredible case study in support of this idea, so it’s logical to assume that this opportunistic trend will persist.
Be a Permanent Owner of Equities
One of Buffett’s most famous quotes is also one of his shortest. He said[6],
“Our favorite holding period is forever.”
As is evident throughout his early partnership letters [7] (pre-Berkshire), one thing Buffett seemed to understand better than most people is the long-term value of compound interest. Simple math reveals that most of the benefits of compounding occur long after the initial purchase date. Thus, it’s the length of the uninterrupted holding period in combination with which assets you choose to own (i.e., equities versus bonds—see principle #1) that will largely determine your lifetime investing returns. Not surprisingly, the mathematical nature of compounding is why we so frequently discuss the importance of being a permanent owner of equities…or why our favorite holding period is forever.
To be clear, there is nothing that can guarantee success when it comes to investing, but I’d like to think that if most people embraced these four timeless ideas, they'd be more successful as a result.
[1] Reuters
[3] 2011 Berkshire Hathaway Shareholder Letter (see page 16)
[4] Buffett and Munger Unscripted by Alex Morris
[7] Warren Buffett’s Ground Rules by Jeremy Miller
S&P: 5,910
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