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It says something about Warren Buffett’s status as the world’s greatest investor that his retirement at 94 has come as a shock. It felt like he’d go on forever. How will we survive without him?
On Saturday, Buffett surprised everyone by saying he’ll recommend to Berkshire Hathaway’s board that Greg Abel should become chief executive at the end of the year.
With typical modesty, he said: “I think the prospects of Berkshire will be better under Greg’s management than mine.”
But many will still regret Buffett’s absence given the unparalleled success he’s had over the last 60 years.
Stepping back
There will only ever be one Sage of Omaha. This is a man who bought his first stock at the age of 11, and submitted his first tax return two years later.
Millions of investors worldwide try to emulate Buffett, some feeding on his every announcement.
Yet Buffett is more than just a money man. He’s a pretty handy philosopher too. My personal favourite quote is this: “Someone is sitting in the shade today because someone planted a tree a long time ago.”
That doesn’t just highlight his favourite theme, which is that we should invest for the long term, not chase a fast buck.
It applies to anybody who sets something down for the future, whether investing in a Stocks and Shares ISA, raising a family or, well, planting a tree.
Living on through method
Buffett is clearly a genius. Most of us will never emulate him. But here’s the good news. Buffett has spent a lifetime passing on his wisdom, and that’s not going away.
His investment philosophy is to shun market trends and timing, and look for companies with solid fundamentals, strong earnings and the potential to deliver long-term growth.
Patience and discipline are key. He’s happy to give decades for investments to realise their potential.
Of course he makes mistakes. He came very late to US technology stocks, admitting he didn’t understand the sector. But he got far, far more right than he ever got wrong.
It’s why I bought JD Sports
Today, with the stock market shaken by Donald Trump’s tariffs, his philosophy is more pertinent than ever. At The Motley Fool, we’ve been urging readers to consider buying stocks during the dip. We always do.
I’ve done it myself, picking up FTSE 100-listed trainer retailer JD Sports Fashion (LSE: JD).
The JD Sports share price soared for years as the business expanded rapidly, but momentum has stalled. After two underwhelming Christmas periods, the stock is down 30% over the last year and 50% over two.
It now trades at a mere 6.5 times earnings, which looks compelling value to me. It also has a track record of strong growth and global ambition.
Would Buffett buy JD? I hate to admit it, but no. It doesn’t fully match his checklist: the moat isn’t wide, cash generation is limited, and it’s certainly not outperforming in today’s tough market. Still, it ticks the value box, and its expansion story isn’t over yet (I hope).
I aim to be inspired by Buffett, not copy him slavishly. I’ve still got a lot to learn, and I know who I’ll be learning it from. Warren Buffett may be stepping back, but his wisdom will stick around.
