15 things I learned from “The Tao of Warren Buffett” by Mary Buffett
1. Don’t be greedy
This is one of his themes. One expression regarding taking risks is that there is plenty of money to be made in the middle of the court so there is no reason to go around the edges. The implication was that cheating and bending the rules it's not worth it.
2. Patience is the key
Buy good companies and let it ride for decades
3. Wall Street is the only place where people will drive a Rolls Royce to take advice from people that ride the subway
Warren Buffett has a low opinion of Wall Street!
4. Look for high quality at a low price and then bet big
5. Avoid companies that need to constantly invest in research like IBM or car manufacturers
That's why he likes Coca Cola and wriggley's gum. They sell the same product that they did 100 years ago.
6. Wall Street makes money from activity, Warren makes money from inactivity
Since Wall Street people work from commissions, they're constantly telling you to buy new things and move your money around. Warren takes the opposite approach and holds one thing for 10, 20 years or more.
7. Wall Street over complicates investments so they can sell themselves as the only solution: it is too complicated for you: let me take care of it!
8. Woody Allen: “A stockbroker invests somebody else’s money until it is all gone”
9. Make big bets on just a few things: have a small basket and watch it like a hawk
10. Diversification is just a way not to lose: the winners and losers cancel each other out
11. Warren made his fortune on just 10 investments
12. Writing forces you to think
He does this with pen and paper every year for the Berkshire Hathaway investors letter.
13. He always thinks about the future value of a purchase
A new car does not cost $40,000, it actually costs 20 times that much because of the future value of money.
