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The Latest Reasons To Think, Act and Invest Like Warren Buffett

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

In 2012, author Larry Swedroe wrote a handy little pocket book entitled “Playing the Winner’s Game: Think, Act and Invest Like Warren Buffet.” In it, Swedroe shares some of Buffett’s most successful strategies, and how every investor can use them to build sound investment habits. It’s a helpful little guide and recommended reading for any investor.

Buffett, of course, has not been sitting idly by since Swedroe’s book was published. As Chairman and CEO of Berkshire Hathaway, he achieves each spring what nearly every other publicly traded business owner can only dream of: He publishes an annual shareholder letter that people actually read. Buffett’s 2014 letter does not disappoint. Jam-packed with “Buffettisms,” it inspires us and reminds us yet again why much of Buffett’s advice about investing—and life—is worthy advice indeed.

There are so many good quotes in his letter that it’s hard to choose the best. We encourage you to read the letter in its entirety, as it deserves. But to get you started, here are a few of our favorites:

  • “When promised quick profits, respond with a quick ‘no.’”
  • “I am unable to speculate successfully, and I am skeptical of those who claim sustained success at doing so.”
  • “The fact that a given asset has appreciated in the recent past is never a reason to buy it.”
  • “Games are won by players who focus on the playing field—not by those whose eyes are glued to the scoreboard.”
  • “If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.”
  • “Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits. … For these investors, liquidity is transformed from the unqualified benefit it should be to a curse.”
  • “In aggregate, American business has done wonderfully over time and will continue to do so … The goal of the nonprofessional should not be to pick winners—neither he nor his ‘helpers’ can do that—but should rather be to own a cross section of businesses that in aggregate are bound to do well.”
  • “The ‘know-nothing’ investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results.”

Good stuff, don’t you think? And yet, as Swedroe observes in his book: “While Buffett is widely admired, the majority of investors not only fail to consider his advice but also tend to do exactly the opposite of what he recommends.”

To help you join those who not only appreciate but act on Buffett’s best practices, we would be delighted to share with you a complimentary copy of “Think, Act and Invest Like Warren Buffett.” Just give us a call. And please let us know if we can help you implement these wise words into an actionable investment strategy of your own.