Lessons from Warren Buffett

Published: June 20, 2025

Warren Buffett, CEO of Berkshire Hathaway, made headlines recently with his announcement that he will step down from the role at the end of 2025. Few investors are held in higher regard for their investment prowess than Buffett – also known as the Oracle of Omaha. Since taking control of Berkshire Hathaway (originally a textile manufacturing company) in 1965, the value of the company’s shares has grown by 19.9% annually, nearly double that of the S&P 500 over the same period, a remarkable feat by any standard.

Known as a value investor, Buffett’s philosophy focuses on identifying companies with strong fundamentals that are priced at or below their intrinsic value. His approach is based on extensive research of a company’s financials and qualitative factors, such as management strength and competitive positioning. In the well-known story of his initial investment in GEICO, Buffett took a train to Washington, DC on a Saturday to learn more about the company, only to find the office closed. A janitor directed him to Lorimer Davidson, an investment banker (working with GEICO at the time who would later become the CEO). Their unscheduled meeting left such an impression on Buffett that it led to his first investment in GEICO.

We can all learn from Warren Buffett’s principles on how to achieve success in investing and life. Here are five key lessons to consider:

Think like an owner when investing. Buffett is known for his long-term investment horizon, often holding stock in a company for decades. For instance, he began buying shares of Coca Cola in the 1980s and still holds those shares today. His philosophy reflecting his focus on patience and endurance is embodied in his quote: “Someone is sitting in the shade today because someone planted a tree a long time ago.” Buffett believes that patiently owning quality companies for the long term, rather than trying to time the market, is often a more successful strategy.

Don’t underestimate risk. Buffet is often famously quoted for his two fundamental rules of investing:

  1. Rule Number One: Never lose money
  2. Rule Number Two: Never forget Rule Number One

While short-term markets downturns are inevitable, understanding how much risk you can tolerate – financially and emotionally – along the way is essential. Being realistic about your risk tolerance helps to ensure that temporary setbacks won’t derail your long-term plans.

Know when to buy. In his 2008 New York Times op-ed piece entitled Buy American. I am, written during the global financial crisis, Buffett wrote “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.” Instead of panicking during this severe market downtown, Buffett saw the opportunity to buy quality stocks at discounted prices.

Own up to your mistakes. Even the Oracle isn’t infallible, as he readily admits. He credits the late Charlie Munger, his long-time business partner and close friend, with helping him realize the importance of acknowledging and addressing mistakes. In his 2025 annual letter to shareholders, Buffett wrote “The cardinal sin is delaying the correction of mistakes or what Charlie Munger called thumb-sucking. Problems, he would tell me, cannot be wished away. They require action, however uncomfortable that may be.” While Buffett invests for the long-term, he knows that circumstances and fundamentals change, and potential risk may be underestimated or grow. Careful monitoring of your portfolio is crucial to keeping your strategy on track through different market cycles.

Work with the right advisor. Buffett strongly believes in a disciplined framework for investment decision making. Buffett has warned of investment advisors who are potentially not objective or transparent in their investment advice and guidance.

We are proud that the Klingenstein Fields Advisors’ culture and philosophy align in many ways with that of Warren Buffett. As a fiduciary, Klingenstein Fields Advisors is committed to acting in our clients’ best interests, and we believe in full transparency in our approach, process, and fees.

As always, we are honored to serve as your trusted advisor. Please reach out to us at 212.492.7000 at any time with any questions and concerns you may have regarding your portfolio strategy. If you are not yet working with Klingenstein Fields Advisors, we welcome the opportunity to discuss how we can help you and your family achieve your long-term wealth planning goals.

 

Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. ® and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.