Warren Buffett Steps Down As Berkshire Hathaway CEO: Know Key Investing Lessons From Ace Investor's Life

Warren Buffett Investing Tips: Ace investor Warren Buffett, who is popularly known as the Oracle of Omaha, announced his decision to step down from his post as chief executive of Berkshire Hathaway on May 3.

Buffett said that he is likely to step down by the end of the year.The investing legend gained control of Berkshire Hathaway in the year 1965 and turned the company's fortunes around by transforming it from a textile manufacturer to a holding company conglomerate. Here's a look at some key life lessons from Buffett's six-decade-long career:

'If you don't find a way to make money while you sleep, you will work until you die"

Leveraging the gains you make from your investments is crucial to growing your wealth. The Oracle of Omaha stressed the importance of using the money you earn to make more money. Putting the quote into practice, one of Buffett's earliest investments included National Indemnity and National Fire & Marine. The ace investor acquired a stake in the insurance company in 1967. Notably, the acquisition helped Buffett in utilising the 'float' from the business to invest in other businesses and investments. Float refers to the amount collected by insurance companies in the form of premiums before claims are paid.

"To be fearful when others are greedy and to be greedy only when others are fearful"

Buffett has stressed the importance of often buying or selling against the trend. Buffett purchased blocks of shares of American Express, Coca-Cola Co., and Bank of America in 2007, during an era when these companies had fallen out of favour following scandals and trade headwinds. Notably, Buffett's investment in these stocks is worth more than $100 billion more than what was paid for them, excluding the value of the dividends paid on these shares, as per reports.

"Big opportunities come infrequently. When it's raining gold, reach for a bucket, not a thimble"

Buffett has highlighted the need to make big purchases at attractive prices. The ace investor advocates concentrating investments in the best ideas. Prior to 2016, the Oracle of Omaha claimed that he didn't understand the tech space to pick what to invest in. However, in 2016 he purchased Apple shares worth over $31 billion, making up nearly 50 per percent of Berkshire's equity portfolio. 

He claimed he began to understand the iPhone maker as a consumer products maker rather than a tech company, which prompted his decision. While Berkshire Hathaway has pared its stake in the tech giant, the total value of the holding company's stake in Apple has grown to $174 billion. Buffett even said in an interview that Apple CEO Tim Cook has made more money for the holding company than he himself has.

"I'm somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I've ever made for Berkshire Hathaway," Buffett said.

"The Stock Market Is a Device for Transferring Money from the Impatient to the Patient"

Buffett acquired a stake in See's Candy in 1972 as his close associate, the late Charlie Munger, advised him to do so. Buffett advocates buying 'great businesses at good prices' as if they have enduring competitive advantages.

Advocating long-term investing, Buffett himself has reaped the reward of being patient with his See's Candy investment as the company recorded pretax earnings of $1.65 billion from the company between 1972 and 2011, as per reports.

Notably, the holding company had paid $25 million for its stake in the candy company."The question when we looked at See's Candy in 1972 was, would people still want to be both eating and giving away that candy over other candies. We made a judgement about See's Candy that it would be special and thought it would be special in 1982 and 1992, and fortunately, we were right on it," Buffett said at Berkshire's 2023 AGM.

"It's Far Better to Buy a Wonderful Company at a Fair Price Than a Fair Company at a Wonderful Price"

While electric vehicles have continually gained relevance in the last decade, Buffett's foray into investing in the electric vehicle landscape is much older. Buffett placed a big bet on Chinese EV maker BYD in 2008. Even as most investors placed their big EV bet on Elon Musk's Tesla, Buffett put buying an excellent company's shares at a fair price in lieu of buying a fair company at a wonderful price as he invested $232 million in BYD in 2008 and acquired almost 10 per cent of the company's total stake.

Notably, Berkshire's stake in BYD was worth $9 billion at its peak before Buffett began to book profits. Despite the profit booking, Berkshire's remaining stake is currently worth about $1.8 billion.