May 8, 2026 - Lessons from Berkshire Hathaway: Patience, Discipline, and Diversification
Warren Buffet propelled his company, Berkshire Hathaway, to investing fame with his outstanding returns and straightforward investment philosophy.
There are probably dozens of hours on YouTube of Buffet speaking on his investment philosophy and how he chooses what companies to invest in. It’s no secret.
According to Buffet, he aims to buy profitable, easily-understood, well-managed, established companies at good prices and hold them for the long-term. It’s not very sexy, but it has worked and has made Buffet a billionaire many times over.
Buffet stepped down as CEO of Berkshire Hathaway last year and handed over the reins to Greg Abel. During the annual shareholder meeting in Omaha, Buffet (and now Abel) provides an update on the company, its subsidiaries, and its public investments. The commentary offers an insightful look into Berkshire’s investment philosophy.
Here is what you can learn from the most recent (or really any previous) shareholder meeting that ended last week: patience, discipline, and diversification.
Patience
Patience is probably one of the highest virtues in investing.
Let’s start with what patience does NOT mean. It does not mean timing the market.
Investing takes years to reap its benefits. Buffet has instructed investors to buy good companies and plan to hold for many years, even decades. Investing doesn’t mean buying and selling a few months later. Ask yourself, why would I invest in a company for two weeks if I wouldn’t even hold it for two decades? What kind of company is that?
The market can be volatile and the value of companies will fluctuate. But, long-term investing often yields the best results for the educated investor.
Discipline (Saying “No”)
There are thousands upon thousands of investment opportunities. If you can think of it, you can probably invest in it. But should you?
Financial news and social media want to entice you with the hottest new company, the industry that is going to revolutionize the world, or the stock that is just about to break out to new highs.
Maybe they’re right and maybe they’re wrong. But you’ll always be bombarded with these opportunities.
You need to know and understand what constitutes a good investment, stick to that plan, and say no to everything else. Saying no is a superpower in investing. Buffet and his team of directors (and many other fund managers) pride themselves with how often they have to say no to an investment if it doesn’t fit their criteria.
Diversification
Buffet and his close associate Charlie Munger had been somewhat “critical” of diversification. Charlie Munger once warned about “diworsification” - adding assets to a portfolio that are similar enough that they only add to the complexity and costs, rather than the investment returns.
Buffet made lots of money by making big investments into individual companies. However, look at the total portfolio of Berkshire Hathaway today. It owns ~65 companies outright and has stock holdings in about 40 other companies. While ~100 holdings is a small portion of the total number of publicly-traded stocks, you can argue that it has broad diversification. Berkshire’s holdings represent companies in manufacturing, insurance, retail and consumer goods, banking, technology, utilities, transportation, and real estate.
Headlines like to paint Buffet as an expert stock picker because of his big investments in individual companies, but the reality is much more nuanced and supports the argument that Buffet does have diversified holdings.
Summary
Patience, discipline, and diversification. They’re not easy. They are rewarding. Don’t take it from me - take it from one of the most legendary investors of all time.