Avoid a share market 'buffeting'
Warren Buffett is arguably the world’s best investor. When the top dog at Berkshire Hathaway took over the investment firm in 1965, its shares were worth $US19. At the close of trade on 5 June, it stood at a staggering $US192,100, while Buffet is reportedly worth a cool $US65 Billion.
However the superman of global investing has had a few kryptonic failures. According to a report in the well-regarded investor information service, Motley Fool, Buffett blew a couple of billion dollars on an investment in oil and gas exploration company, Conoco Phillips (NTSE:COP) in 2008. According to Motley Fool, Buffet suggests he made a major mistake as he “bought a large amount of ConocoPhillips when oil and gas prices were near their peak.”
Motley Fool argues that the mistake that Buffett made had nothing to do with picking the wrong investment at the wrong time, in this case, energy stocks. Rather, the great investor admits his mistake was his failure to seek advice. In 2008, Buffett said he made the investment in ConocoPhillips “…without urging from Charlie or anyone else”. Charlie is Buffett’s trusted long-term business partner at Berkshire Hathaway, Charlie Munger.
The point that Buffett is making, according to Motley Fool, is that “an investment decision should always be made after consulting others – whether they’re friends, co-workers, family advisers, or others – who are trusted.”
According to leading financial commentator Paul Clitheroe, Buffett also adheres to the view that a diversified portfolio of shares is preferable to a limited range of shares. “And in choosing your shares, Buffett advises us to ignore the sentiments of the crowd as this is likely to lead to some bad investment decisions,” says Clitheroe.
Frequently Asked Questions about this Article…
Warren Buffett is the chairman and CEO of Berkshire Hathaway and is widely regarded as one of the world's best investors. Since taking over the investment firm in 1965, he has grown its share value from $US19 to $US192,100, amassing a personal fortune of $US65 billion.
Warren Buffett's mistake with ConocoPhillips was investing heavily in the company when oil and gas prices were at their peak in 2008. He later admitted that his error was not seeking advice from trusted partners like Charlie Munger before making the decision.
The key lesson from Buffett's ConocoPhillips investment is the importance of consulting with trusted advisors before making investment decisions. This can help avoid costly mistakes and ensure more informed choices.
Warren Buffett recommends a diversified portfolio because it spreads risk across different investments, reducing the impact of any single investment's poor performance. This approach can lead to more stable returns over time.
Warren Buffett advises investors to ignore market sentiment and the crowd's emotions. Instead, he suggests making decisions based on careful analysis and consultation with trusted advisors to avoid bad investment choices.
Charlie Munger is Warren Buffett's long-term business partner at Berkshire Hathaway. Buffett values Munger's advice and believes that consulting with trusted partners like him is crucial for making sound investment decisions.
Everyday investors can apply Buffett's principles by diversifying their portfolios, seeking advice from trusted sources, and avoiding decisions based on market hype or sentiment. This approach can lead to more informed and successful investing.
According to Warren Buffett, seeking advice is crucial because it provides different perspectives and insights that can prevent costly mistakes. Consulting with trusted advisors can lead to more informed and balanced investment decisions.
Call 1300 880 160
Start a chat
Schedule a call
