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When it comes to investing legends, few names carry more weight than Warren Buffett. The ‘Oracle of Omaha’ has built a fortune — and a devoted following — by sticking to a few simple principles: buy great companies, hold them forever, never pay more than they’re worth.
But in a world of artificial intelligence (AI) stocks, meme trades and crypto hype, I find myself asking: is his style still relevant?
A focus on quality
Right up until his recent retirement news, the CEO of Berkshire Hathaway stuck by his principles of long-term quality investing. He focuses on businesses with strong moats, consistent profits and capable leadership.
Rather than chasing trends, he invests in companies he understands — think Coca-Cola, American Express and, more recently, Apple (NASDAQ: AAPL). He’s also famously averse to debt and tends to keep a massive cash pile on hand… ‘just in case’.
All of this seems pretty self-explanatory — but these are principles that were forged in the 60s. How do they translate in today’s ruthless corporate environment where company’s come and go overnight?
To answer that question, it’s necessary to assess whether his style relied on the macroeconomic factors of the time — and how they’ve evolved since.
The Buffett approach
There’s no denying Buffett’s style has stood the test of time. For decades, his approach worked wonders, helping Berkshire deliver returns that consistently beat the S&P 500 by a wide margin. Nowadays, the investing landscape’s changed dramatically. Tech stocks dominate the market, interest rates have jumped and traders are looking for quicker wins.
A recent article in the Wall Street Journal lamented: “There will never be another Warren Buffett“. Having studied under Benjamin Graham, the father of value investing, he began his career before the rise of index funds and large institutional investors.
But the article highlights not only his fortuitous timing but his humility, discipline, remarkable memory and obsession with financial information. More than any market conditions, it’s likely these qualities helped guide his success.
Cautious and consistent
Consider Apple, for example — Berkshire’s largest holding, at over $150bn. A cautious technophobe, Buffett resisted the popular Silicon Valley stock for years. When eventually investing in 2016, the decision wasn’t based on hype but rather consistent performance, brand strength and customer loyalty.
Yes, he missed out on Apple’s near-1,000% growth in the decade prior — but it’s since climbed a further 700%.
Since Berkshire bought the stock, revenue has quadrupled and earnings have more than doubled to £93.74bn. And while it still holds considerable debt, it’s dropped by almost 20% this year alone.
But new US trade tariffs have ignited geopolitical tensions with China, one of Apple’s key manufacturing regions. This presents a high risk of supply chain disruption, which could cost the company dearly. And with many rivals innovating more rapidly, the iPhone maker can’t risk falling behind.
Still relevant
The combination of steady revenue, a strong balance sheet and a history of share buybacks make Apple a classic Buffett pick: high-quality, cash-generative and built to last. It stands as testament to how a patient, cautious approach is still relevant — even in today’s frantic, AI-driven world.
So it’s no surprise it became one of his company’s best investments and one still worth considering today.
