On July 3, 2006, Warren Buffett headed to the US Bank branch in downtown Omaha, walked downstairs and opened his safe deposit box. He removed the paper, a certificate of 121,737 shares of Berkshire Hathaway stock. It was worth about $11 billion. Money from the sale of these shares, a mere portion of his Berkshire holdings, will become the first tranche of his program, giving away virtually all of his wealth.
That bank visit was a proper financial signal event in the life story of a man widely regarded as Buffett’s lifetime bookend and widely regarded as the world’s biggest investor. He said luck When he reminded me of visiting that same bank at the time, then called Omaha National, almost 70 years ago, an event that looks like another bookend in Buffett’s financial life. He was six years old. His father set up a savings account for him and put in $20.
During these two bank visits, Buffett created Berkshire Hathaway, making it America’s largest conglomerate and became world-renowned. On May 3, he signaled the end of that incredible run and announced that he would hand over the CEO reins to longtime Greg Abel’s midfielder at the end of the year.
Buffett leaves behind an unparalleled record. He achieved an average annual return of 19.9% to Berkshire shareholders from 1965 to 2024, or about 5.5 million% of the original investors, including himself. By the 2020s, his wealth had reached over $200 billion and if he had not given him that much stock he would have made him the richest person in the world.
So, the obvious question that has been revising investors for decades: how did Buffett grow $20 to well beyond $200 billion? Why couldn’t others do that? How did he find the secret? What is the secret?
Finding answers with proverbs is fascinating. “It’s much better to buy a great company at a great price than a fair company.” “If the market is closed for 10 years, you’re just going to buy something you’re totally happy to hold.”
He believed in them fiercely, but they were not the key to his success. The key was that he didn’t stop asking for the key. When asked to explain his success, he often said it was simply “rational.” It sounds very easy. But rational people change their beliefs when reality directs them, and most of us feel that they are doing something unbearably difficult.
Buffett was able to do that. His adage sounds as if he found him carved on a stone tablet, but in reality he learned them. He was just a kid when he began to learn the difficult methods. As a teenage investor, he tried technical analysis and studied stock prices in search of “candlesticks” or “bearish divergence signals.” It didn’t work, so he gave up. He has tried by almost every investor to timing the market and choose the right moment to buy and sell. That didn’t work either, so he left it behind.
He even made an unreasonable and emotional decision. In 1942, at the age of 11, he purchased his first stock. The three shares of the city service are his own priority, with his younger sister Doris being three shares. (Cities Service was an oil and gas company now known as Citgo.) Prices quickly fell. He sold when it finally recovered and rose just above the price he paid. And prices continued to rise quickly. He never forgot that he should ignore the price he paid. He also learned that he was sure he could do it well if he was trying to invest other people’s money. His biographer Alice Schroeder writes that Buffett “will call this episode one of the most important things in his life.”
Most people find it unbearably difficult to change their beliefs when reality directs them. Buffett was able to do that.
A few years later, he dared to change his investment philosophy once again as a successful fund manager who is at stake in more ways. At the Columbia Business School from 1949 to 1951, Buffett became a dedicated student at Benjaming Raham, co-author of the famous investment guide. Security Analysisadvised to buy shares only at extreme bargain prices based on financial ratios. But Buffett’s business partner, Charlie Munger, has convinced them that a fundamentally good business is worth buying, even if they’re not screaming for bargains. In 1972, Buffett bought Grahamians triple the candies of Shee at the value of a helatic and expensive book, never looking back. See’s is a great performer for Berkshire.
He never stopped challenging his beliefs. He said that when he saw the dot com bubble in the late 1990s. He explained that he did not invest in internet stocks. Silicon Valley cheerleaders shook their heads.
When the crash hit, he had all the rights to self-righteousness, but he later found a much better Liposte. In 2016, he began purchasing from Tech Royalty: Apple. It became the largest holding in Berkshire’s stock portfolio.
Wall Street analysts often warned that Apple’s stocks were too high. Ben Graham would have been disapproved. However, Buffett saw an incredibly good business, and there was a huge “moat” of competition around its products, making it extremely profitable. He told shareholders in 2023, “It just happens to be a better business than we own.” (Berkshire sold most of Apple’s stake during 2024, but at the end of the year it was the company’s biggest stake.) At Berkshire’s recent annual meeting, Buffett said: [Apple CEO] Tim Cook has made Berkshire more money for Berkshire Hathaway than he’d ever made. ”
While constantly rethinking how to make money, Buffett was rethinking how to give it. For years he had planned to start donating his wealth with his death through the foundations he established (he was over 99% of which). But in 2006, he changed his mind at age 75, well past the age where most CEOs retired. He instead immediately began giving to the Bill & Melinda Gates Foundation, with small quantities sent to the foundations established by his former foundation and each of his three adult children. (Bill Gates is now making an incredible commitment with the help of those contributions and with Buffett’s blessing.
Why the shift? Once again he shaped his opinion to fit reality. He was a good friend of Gates for 15 years and admired his work at the Foundation. They were also much younger than themselves. As he explained, his conclusion luckPure Buffett said, “What can you be more logical than finding better equipment than you do?”
That took him to his secure deposit box in downtown Omaha and deleted $11 billion worth of paper. He sends it to the Gates Foundation soon. He bid farewell to a considerable part of his life’s work, so we cannot know his feelings at the moment, but it is difficult to believe he swallowed or trembled. It’s likely he was laughing.
3 great pivots
Warren Buffett is better than most people on the changing course. This is a fact that explains both his success and his longevity.
Give up the “cigar butt”
Buffett began his career as a pupil of Benjamin Graham. But Buffett’s business partner, Charlie Munger, has convinced him it’s worth buying even if some powerful companies are not negotiating.
Keep up with technology
Even if he built an unparalleled track record, Buffett shunned investments in high-tech companies and argued that their future value was impossible to estimate. However, he eventually came to recognize Apple as a traditionally great business with a huge competitive “moat”. It became one of Berkshire Hathaway’s top performance holdings.
Give a better gift
Buffett had long planned to give him a large portion of his wealth after his death. However, the achievements of the Bill & Melinda Gates Foundation changed his mind, raising about $40 billion in money. As he said luck“Whatever you want to do, can you be more logical than finding someone equipped than you do?”
This article is published in the June/July 2025 issue luck With the headline “Warren Buffett’s Secret of Success: He Knows How to Change Your Heart.”
This story was originally featured on Fortune.com.
