In uncertain times like now, it is even more important that we find a firm ground to stand on and strong beliefs to stick close to. For me, I find myself turning to my source of “inspiration” – the investing mogul himself
– Mr Warren Buffett.
Indeed, I have found that when it comes to money outlook, investing approaches or even life in general, the chairman and founder of Berkshire Hathaway – a multinational conglomerate holding company – always has the right words to lend me some much needed wisdom and motivation.
In fact, I recall that at the tail end of the Great Recession in 2009, Warren Buffett shared these thoughts at Berkshire Hathaway’s annual shareholders meeting: The best things a person can do to protect against inflation are to sharpen their skills and work to be at the top of their field.
“If you’re the best teacher, if you’re the best surgeon, if you’re the best lawyer, you will get your share of the national economic pie regardless of the value of whatever the currency may be,” the then-78-year-old said.1
In the latest shareholders meeting held in-person on 2022, he gave an even more acute description of his conviction:
“The best protection against inflation is your own personal earning power… No one can take your talent away from you.”2
Ultimately, the best thing to do is to invest in yourself – whether it is through gaining knowledge, enhancing skills or planning well.
The next-best course of action to protect against inflation, Buffett says, is to invest in a business making products that are in demand, regardless of the performance of the dollar. As we are well aware, Buffett is a value investor – and a very good one at it. However, we should also note that his preferred strategy requires A LOT of patience, and a STEADFAST long-term focus. We all know how it is – looks easy in theory, but really tough to achieve in reality.
The most crucial thing to know first and foremost about long-term, value investing: It is very difficult to determine whether a company is undervalued. To make better decisions, you need to be skilled in fundamental analysis – which is a rather tedious and time-consuming process of deep-diving into a tremendous amount of financial data, understanding the market for the company’s product, its management team, and the future plans.
So you would ask: Should I give up on following Warren Buffett’s footsteps? Recognising this challenge faced by investors, Buffett has once shared an insightful take that emphasises the need for gaining the right knowledge.
“There is nothing wrong with a ‘know nothing’ investor who realises it. The problem is when you are a ‘know nothing’ investor but you think you know something.”3
Still relevant today – as with much of his well-loved quotes and quips! If you are looking to gain knowledge to set yourself right on your investing journey, I would be happy to share my insights with you.
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