Value investing involves searching for companies trading below their intrinsic value and prefers quality businesses with strong growth potential, strong leadership, and “economic moats”—a phrase coined by Buffett referring to a company’s long-term competitive advantage.
While value investing has ushered in great success for Buffett over his career, it’s a practice that requires a lot of time and patience because it involves identifying companies trading below their intrinsic value—and waiting for markets to recognize and correct the undervaluation. That’s why so few people follow this practice.
To be sure, Buffett’s advice may feel antiquated—or for a day and age very different from how our current stock market moves and works. Especially in the age of AI, inflation, and tariffs, stocks can move very rapidly, making it exceedingly difficult to know where to invest.
Still, Buffett advocates for not taking action just to make moves—but rather values patience: “The stock market is a device for transferring money from the impatient to the patient.”
“When in doubt, keep holding,” he said. “I’ve made most of my money sitting on my ass.”
