[The Stone from Other Hills] Warren Buffett: The Ultimate Wealth of Patience and Strength

#CoinDesk10月Gate战绩来袭
"The market is a tool that transfers money from the impatient to the patient."

In a modern financial world filled with high-frequency trading and complex algorithms, Warren Buffett still adheres to a seemingly outdated quality—patience. This investment master, known as the "Oracle of Omaha," has proven the timeless value of simple wisdom through over half a century of practice. Starting with his first stock purchase at the age of 11, he gradually grew an initial capital of $10,000 into a personal fortune of over $100 billion, while the core of his method is astonishingly simple: find excellent companies, hold them patiently, and let time be your friend.

Legendary Career: From Newsboy to Billionaire

Warren Buffett's investment career is a chronicle of patience and learning:

Early Enlightenment (1930-1950)

· Bought his first stock (Cities Service Preferred) at age 11, sold it for a small profit after a decline, and then saw the stock price soar, which made him realize the value of holding patiently.
During my teenage years, I accumulated an initial capital of about $10,000 through small businesses like delivering newspapers and selling cola.
· Studied value investing principles under Benjamin Graham at Columbia University.

Partnership Fund Period (1956-1969)

· Established the Buffett Partnership Fund in 1956 with initial capital of $105,000.
· The average annual return over 13 years reached 29.8%, far exceeding the Dow Jones index's average of 8.7% during the same period.
· Dissolved the partnership fund in 1969, believing that there were no cheap stocks to be found in the market.

Berkshire Era (1965 to present)

· Took over the struggling textile company Berkshire Hathaway in 1965, gradually transforming it into an investment holding company.
· Achieved an average annual compound growth rate of 20.3% over 55 years, far exceeding the 10.0% of the S&P 500 index during the same period.
· Turn a $10,000 initial investment into a legendary record of over $300 million

Core Investment Philosophy: Four Key Principles that are Simple but Not Easy

Warren Buffett's investment system is built on a few simple yet powerful principles:

1. Principle of Intrinsic Value of Enterprises

"The price is what you pay, the value is what you get." Buffett focuses on finding companies whose intrinsic value is far higher than their market price. His approach is very straightforward:

· Only invest in businesses you understand.
· Focus on the long-term competitive advantages of enterprises (moat)
· Calculate the present value of a company's future free cash flows.

2. Margin of Safety Principle

Originating from Graham's concept of margin of safety, Buffett developed it into: "When you build a bridge, ensure it can carry 30,000 pounds, but you only let 10,000-pound vehicles pass. " This principle is reflected in practical operations as:

· Only buy when the price is significantly below the value.
Ignore short-term market fluctuations and focus on the long-term value of the enterprise.
· Be patient and wait for real opportunities to arise; it is better to hold cash than to invest in inferior assets.

3. Long-term Holding Principle

Warren Buffett's famous analogy is: "My favorite holding period is forever." He believes that frequent trading is the enemy of investing, and the benefits of long-term holding include:

· Delay and reduce capital gains tax
· Reduce transaction costs
· Let the power of compound interest be fully realized

4. Capability Circle Principle

"Knowing what you don't know is more important than knowing what you know." Buffett always insists:

· Only invest in industries and companies you understand.
· Calmly admit that you do not understand many fields.
· Act within your circle of competence, but gradually expand the boundaries of your circle of competence.

Classic Battle: Coca-Cola's Decade of Vigilance

Warren Buffett's investment in Coca-Cola perfectly embodies his philosophy of patience:

Investment background

· Bought Coca-Cola stock for the first time in 1988, having observed the company for over 50 years.
· When I was young, I spent 25 cents to buy 6 bottles of Coca-Cola and then sold them at a price of 5 cents per bottle, already understanding its business model.

Positioning process

· Invested in batches from 1988 to 1994, ultimately accumulating an investment of 1.3 billion US dollars.
· The average purchase cost is approximately $6.50 per share (adjusted for stock splits)

Patience brings rewards

· Held for over 35 years, experiencing multiple market fluctuations without ever reducing holdings.
· Cumulative dividends received exceed 7 billion USD
· Current position value exceeds $25 billion, with a return rate of over 1,900%

This investment demonstrates Buffett's core ability: to discover excellent companies, buy them at a reasonable price, and then hold them patiently for decades.

Three Stone Revelation:

1. A remedy against overtrading
Warren Buffett once humorously said: "Investing should be boring and should not be exciting." In a market filled with FOMO (fear of missing out), reducing trading frequency and improving decision quality may be the most essential skills for ordinary investors to learn.
2. Firm Belief in the Miracle of Compound Interest
"Life is like a snowball; the important thing is finding wet snow and a long hill." Buffett proved the power of long-term compounding—99% of his wealth was accumulated after the age of 50. For young investors, starting early and sticking to long-term investments is more important than chasing short-term profits.
3. The Courage of Reverse Thinking
"Be fearful when others are greedy, and be greedy when others are fearful." Buffett's classic saying is validated during every market crisis. During the pandemic in 2020, when the market was in panic, he boldly invested, proving once again the value of going against the tide.
4. The Power of Simplicity
In today's world where financial products are increasingly complex, Buffett has always insisted on investing in "simple and understandable companies." This return-to-basics mindset has helped him avoid the tech bubble of 2000 and the subprime mortgage crisis of 2008.

Three Stones Conclusion

Warren Buffett once admitted: "Investing is actually very simple, but it is not easy." The "not easy" here does not refer to the complexity of knowledge, but rather to the character required for execution—especially patience.

In today's culture of instant gratification, we are accustomed to pursuing quick gains, frequently checking our accounts, and constantly adjusting our strategies. However, Buffett's career reminds us that true wealth accumulation often occurs in a state of stillness – after finding excellent companies, patiently holding onto them, and letting time and compound interest work for you.

What he left to investors is not only an astonishing record of wealth but also a fundamental attitude towards investment: to view investment as running a business rather than trading pieces of paper. From this perspective, market fluctuations are no longer risks but opportunities; time is no longer an enemy but a friend.

The ultimate victory does not belong to the smartest or the busiest, but to those who are the most patient. In tomorrow's series, we will continue to explore the wisdom of another investment master and see how his long-term perspective compares to Buffett's.