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How to Invest Like Warren Buffett

Delve into the Berkshire chairman and CEO’s investment strategy.

Photo of Warren Buffett

Warren Buffett is undoubtedly one of the most respected investors of all time. On paper, Buffett’s investment strategy is pretty simple:

  • Buy businesses, not stocks. In other words, think like a business owner, not someone who owns a piece of paper (or these days, a digital trade confirmation).
  • Look for companies with competitive advantages that can be maintained, or economic moats. Firms that can successfully fend off competitors have a better chance of increasing intrinsic value over time.
  • Focus on long-term intrinsic value, not short-term earnings. What matters is how much cash a company can generate for its owners in the future. Therefore, value companies by using a discounted cash flow analysis.
  • Demand a margin of safety. Future cash flows are, by their nature, uncertain. To compensate for that uncertainty, always buy companies for less than their intrinsic values.
  • Be patient. Investing isn’t about instant gratification; it’s about long-term success.

Of course, what's simple in theory can be less so in execution.

If you want to emulate Buffett’s investment strategy, we’ve compiled some of Morningstar’s work on the approach that he and late partner Charlie Munger have pursued at Berkshire Hathaway BRK.A BRK.B. We’ve also taken a look at funds that emulate Berkshire’s style and some of the undervalued stocks in Berkshire Hathaway’s portfolio today. We wrap things up with words of wisdom from Buffett on investing.

Warren Buffett on Charlie Munger, Realistic Investment Expectations, and the Stocks He Won’t Sell

Key takeaways from Warren Buffett’s 2023 letter to Berkshire Hathaway’s shareholders.

Berkshire Hathaway Earnings: Cash Balances Hit Record $167.6 Billion as Firm Remains Disciplined

We’re expecting to raise our fair value estimate on Berkshire stock.

4 Warren Buffett Stocks to Buy After Berkshire Hathaway’s Latest 13F Filing

Plus, the stocks Berkshire bought and sold last quarter.

Berkshire Hathaway 13F Filing: More Sells Than Buys in Quieter Q4

The biggest move for Warren Buffett and team was to sell a chunk of HP stock as well as a third of the Paramount Global stake.

Final Thoughts From Charlie Munger on Apple, Warren Buffett, and the Big Costco Error

Buffett’s partner at Berkshire Hathaway has died. Here are some excerpts from one of his final interviews.

10 Funds That Buy Like Buffett

These mutual funds hold the same stocks as Warren Buffett’s Berkshire Hathaway.

What I Hope My 12-Year-Old Learned at Berkshire Hathaway’s Annual Meeting

Life lessons from Warren Buffett and Charlie Munger.

12 Lessons on Money and More From Warren Buffett and Charlie Munger

Words of wisdom from two of the world’s most successful investors.

What We’ve Learned From Warren Buffett and Charlie Munger

How these legendary investors have inspired the financial world and shaped the way we think at Morningstar.

How to Pick Stocks Like Warren Buffett

Berkshire Hathaway has traditionally benefited from being able to sniff out companies with moats, including for these holdings.

3 Things Investors Can Learn From Warren Buffett

Whether you’re new to the market or not, there’s a lot to learn from Berkshire Hathaway’s leader.

Even Warren Buffett Thinks Picking Stocks Is Hard

Great investing opportunities are rare, which is why indexing makes sense for most investors.

5 Takeaways From Berkshire Hathaway’s 2021 Shareholder Letter

Warren Buffett discusses why he keeps cash on hand, warns of ‘bloviated bull,’ and explains why he’s not a stock-picker.

2020 Shareholder Letter Recap: Warren Buffett on Bonds, Buybacks, and Apple

What Berkshire Hathaway’s chair left out of this year’s annual shareholder letter is almost as notable as what he put in.

2019 Shareholder Letter Recap: 4 Takeaways From Berkshire Hathaway’s Annual Shareholder Letter

Warren Buffett addresses Berkshire Hathaway after his exit, the problem with corporate boards, and why equities are still the place to be long term.

2018 Shareholder Letter Recap: Buffett Says Focus on the Forest, Forget the Trees

In his annual letter to Berkshire Hathaway shareholders, Warren Buffett argues why the whole is much greater than the sum of its parts—and comments on that sizable cash stake.

2017 Shareholder Letter Recap: Stick With Big ‘Easy’ Decisions

In his annual letter to Berkshire Hathaway shareholders, Warren Buffett makes the case for doing less and sticking to the fundamentals of investing.

2016 Shareholder Letter Recap: Indexing the Best Choice for Investors Large and Small

Berkshire Hathaway CEO Warren Buffett praises indexing and American dynamism in his 2016 letter to shareholders.

2015 Shareholder Letter Recap: America’s Economic Magic Is Alive and Well

America’s golden goose of commerce and innovation will continue to lay more and larger eggs, writes the Berkshire Hathaway chair and CEO Warren Buffett in his annual letter to shareholders.

2014 Shareholder Letter Recap: Berkshire’s Simple Secrets to Success

In the firm’s annual letter to shareholders, Warren Buffett and Charlie Munger reflect on Berkshire Hathaway’s history and future prospects.

Charlie Munger, Warren Buffett Built Berkshire Hathaway to Thrive After They’re Gone

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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