On July 3, 2006, Warren Buffett went to the American bank branch in downtown Omaha, entered, went down and opened his safe. He deleted a piece of paper, a certificate for 121,737 actions by Berkshire Hathaway. It was worth about $ 11 billion. The money for the sale of these actions, a fraction of his Berkshire holdings, would be the first phase of his program to give almost all of his wealth.
This bank visit was a book greenhouse in the life of Buffett, a financial signal event rightly in the history of man’s life largely considered as the largest investor in the world. He said Fortune As it reminded him of a visit to this same bank, then called Omaha National, almost 70 years earlier, an event which, retrospectively, seems that the other book set in the financial life of Buffett. He was 6 years old. His father created a savings account for him and invested in $ 20.
Between these two bank visits, Buffett created Berkshire Hathaway, made it the largest conglomerate in America and has become world famous. On May 3, he pointed out the end of this remarkable race, announcing that he would give the CEO back to his long -standing lieutenant Greg Abel at the end of this year.
Buffett will leave with an incomparable record. He obtained an average annual return of 19.9% to Berkshire shareholders from 1965 to 2024, or around 5.5 million percent in total for original investors, including himself. In the 2020s, his wealth would have reached more than $ 200 billion, making him the richest person in the world – if he had not given as many stocks.
Thus, the obvious questions that have pierced investors for decades: how has Buffett increased from $ 20 to more than $ 200 billion? Why couldn’t others do it? How did he find the secret? What is the secret?
It is tempting to seek answers in the aphorisms that Buffett invented so memorably: “Be afraid when the others are greedy and gourmet when others are afraid.” “It is much better to buy a wonderful business at a fair price than a fair business at a wonderful price.” “Buy only something that you would be perfectly happy to hold if the market closed for 10 years.”
He believed them intensely, but they are not the key to his success. The key is that he never stopped looking for the key. When he was asked to explain his success, he often said that he was simply that he was “rational”. It seems so easy. But rational people change their beliefs when reality dictates, and most of us find it excruciatingly difficult.
Buffett could do it. His maxims sound as if he had found them engraved on a stone tablet, but in reality, he learned them. He was just a child when he started learning the hard way. As a teenager investor, he tried a technical analysis, studying the graphics of the shares in search of “candlesticks” or “signals of divergence downstreams”. It didn’t work, so he abandoned. He tried what almost all investors are trying, timing the market, choosing the right times to buy and sell. It didn’t work either, so he left it behind.
He even made irrational emotional decisions. At 11 years old, in 1942, he bought his first actions: three actions from Cities Service Preferred for himself and three actions for his sister Doris. (The cities service was the oil and gas company now known as the CITGO.) The price has quickly dropped. When he finally recovered and increased just above the price he had paid, he sold – and the price continued to increase, soon the fivefold. He has never forgotten that he should ignore the price he had paid, which he could not change and focus only on the future of the company. He also learned that if he was going to invest someone else’s money, he would better be very sure that he could well do. His biographer, Alice Schroeder, wrote that Buffett “would call this episode one of the most important in her life”.
Most people find it atrociously difficult to change their beliefs when reality dictates. Buffett could do it.
Years later, as a success manager with much more at stake, he dared to change his investment philosophy again. At the Columbia Business School from 1949 to 1951, Buffett had become a dedicated student of Benjamin Graham, co-author of the famous investment guide Security analysisWho advised to buy shares only at extreme execution prices according to financial ratios. But Buffett’s trading partner Charlie Munger convinced it that fundamentally good companies could be useful even if they did not shout good deals. In 1972, Buffett bought See the SEE candies for three times the accounting value – heretically expensive, in grahamites – and never looked back. See’s remains a great interpreter for Berkshire.
He has never stopped challenging his beliefs. He saw the Dotcom bubble of the late 1990s for what it was and said. He would not invest in internet actions, he explained, because they were impossible to appreciate. The cheerleaders of Silicon Valley shook their head with sufficiency, deploring that the old Warren had let the technological revolution pass.
When the accident struck, he had the right to be sufficient himself, but he then found a much better response. In 2016, he began to buy technological fees: Apple, which has become the largest participation of the Berkshire shares portfolio.
Wall Street analysts had often warned that Apple’s stock was too expensive. Ben Graham would have disapproved. But Buffett saw an incredibly good – extremely profitable business, with a huge competitive “ditch” around its products. He told his shareholders in 2023: “It turns out that it is a better business than anything we have.” (Berkshire sold the majority of her Apple shares in 2024, but she remained the biggest equity outfit of the company at the end of the year.) During the recent annual meeting of Berkshire, Buffett said: “I am somewhat embarrassed to say what to say what to say what to say what to say what to say what [Apple CEO] Tim Cook did a lot more Berkshire money than I have never done for Berkshire Hathaway. »»
While always thinking how to earn money, Buffett also rethinks how to give it. For years, he had planned to start giving his wealth (“more than 99%,” he said) to his death by a foundation he had installed. But in 2006, at 75, far beyond the age when most of the CEOs retired, he changed his mind. Rather, it would begin to give it immediately, mainly to the Bill & Melinda Gates Foundation, with smaller amounts going to its original foundation and the foundations created by each of its three adult children. (Bill Gates is now making a remarkable commitment with the help of these donations, and with the blessing of Buffett; see “Bill Gates at 200 billion Monshot dollars: in the biggest bet on humanity, a philanthrope has never done”))))))))
Why change? Again, he shaped his views to adapt to reality. He had been a good friend of gates for 15 years and admired their work at the Foundation, which was big enough to manage the huge sums that he would send them. They were also significantly younger than him. His conclusion, as he explained to Fortunewas pure buffett: “What can be more logical, in what you want, than to find someone better equipped than you do?”
This is what brought him to his safe in downtown Omaha, by removing a piece of paper worth $ 11 billion. He would soon send him to the Gates Foundation. We cannot know his emotions at that time, as he said goodbye to an important part of the work of his life, but it is difficult to believe that he swallowed hard or trembled. It is more likely that he was smiling.
Three large pivots
Warren Buffett was better than most to change the course – a fact that explains both its success and its longevity.
Abandon “cigar butts”
Buffett began his career as a disciple of Benjamin Graham, who recommended buying actions only at rock prices. But Buffett’s trading partner, Charlie Munger, convinced it that some strong companies were worth buying even when they were not good deals – paving the way of the best investments in Buffett.
Catch up
Even if he has built a peer -free assessment, Buffett avoided investing in technological companies, arguing that their future value was impossible to estimate. But he finally came to recognize Apple, under the CEO Tim Cook, as a traditionally formidable company with a huge competitive “ditch”. He has become one of the most efficient assets of Berkshire Hathaway.
Donor
Buffett had long planned to give most of his wealth after his death. But the achievements of the Bill & Melinda Gates Foundation changed their mind and attracted some $ 40 billion in his money. As he said Fortune“What can be more logical, in everything you want, than finding someone better equipped than you do?”
This article appears in the June / July 2025 issue of Fortune With the title “The secret of Warren Buffett to success: he knew how to change his mind”.
This story was initially presented on Fortune.com
