Sharing Buffett’s wisdom

Investment specialists share favourite quotes from successful US investor Warren Buffett, writes David Wilson

WORTH more than $120 billion, legendary investor Warren Buffett ranks as the world’s third richest man.

Mr Buffett’s wisdom is presented online by scores of websites, while more than 16,000 devotees attended his company Berkshire Hathaway’s annual meeting this year – a record high. When he speaks, millions listen, so we asked three Australian financiers to give their take on their favourite Warren Buffett sayings.

Brenton Tong, the managing director of the financial planning practice Financial Spectrum, quoted a Buffett tip that says “only invest in simple businesses that you understand”. Mr Tong’s take was that any investment proposal must add up. “I rely very heavily on a mixture of intuition and logic,” he said. “And, yeah, I often say to people: ‘If it’s not logical, question why’.”

Mr Tong said investors should be wary of schemes claiming to have entered a new era or a new economy, where old rules no longer applied.

He highlighted a second Buffett quote: “Someone’s sitting in the shade today because someone planted a tree a long

Warren Buffett, chairman and CEO of Berkshire Hathaway. Picture: Nati Harnik/AP Photo time ago.” “I’ve met many, many, many, multi-millionaires,” Mr Tong said. “Ninety per cent of them had a vision of how they’re going to do it.”

Ted Richards, the business development director for online investment firm Six Park, picked: “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”

“The best investing can often be boring, which means patience is one of the most important qualities that a successful investor can have,” he said.

Chris Carlin, founder of advisory Master Your Money Now, said his favourite Buffett tip was: “Be fearful when others are greedy and greedy when others are fearful.” “This assists with clients who are seeking to invest, especially in the share market, and ensures clients buy low and sell high, rather than the other way around,” he said.

For instance, Mr Carlin said, the 2008 Global Financial Crisis was a great time to buy shares because people were fearful and selling for considerable losses.

“However, if we consider the present time, where the Australian sharemarket is at a near all-time high, caution should be heeded,” he said.

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