Warren Buffett Once Summed Up Investing in 13 Words. Here's Why It's More Important Than Ever.
The Oracle of Omaha's wisdom can make you a better investor.
Warren Buffett's 13-word investing philosophy—"Be fearful when others are greedy, and be greedy when others are fearful"—has become especially relevant in today's market. The Oracle of Omaha's enduring wisdom has allowed Berkshire Hathaway (BRKA +0.45%) (BRKB +0.47%) shares to soar 19.7% annually from 1965 to 2025, outperforming the S&P 500's 10.5% annualized return.
While the benchmark's recent 131% total return since October 2022 may seem impressive, it's trading at an elevated price-to-earnings ratio of 41.8, near record highs. Berkshire's $359 billion cash reserve suggests a cautious approach, but market sentiment shouldn't dictate investment decisions. Investors should evaluate market sentiment, but not rely on it for predictions.
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