Now, an old video of Buffett resurfaced on social media, where the Berkshire Hathaway CEO can be seen persuading investors to develop their own insight and not rely on others while choosing stocks or buying houses or a business.
The ace investor, who first bought stock at age 11 and first filed taxes at age 13, was speaking during Berkshire Hathaway’s 1994 annual meeting when he cautioned investors to not put too much faith in projectections or forecasts. He further asserted that never listen to those who don’t have much financial interest in the outcome of those forecasts or projections.
“Don’t ask the barber whether you need a haircut,” Buffett told the audience. At the same meeting, Buffett’s longtime partner Charlie Munger also apprised the audience about an interesting incident, where they were once offered a thick book of $2 million worth of projections during the process of buying a business.
“We almost paid $2 million not to look at it,” Buffett joked to the audience. “I do not understand why any buyer of a business looks at a bunch of projections put together by a seller… or his agent,” the legendary investor added.
Here’s the video:
“Don’t ask the barber whether you need a haircut.” – Warren BuffettWarren and Charlie discuss the importance of… https://t.co/cNWnvLdCJy
— Compound248 (@compound248) 1663412920000
Buffett, who owns dozens of successful companies, further added that instead of taking advice from an ‘expert’, it’s better to do some research about the future of business someone wants to invest in, otherwise it wouldn’t yield the desired results.
“If we don’t have some idea ourselves of what we think the future is, to sit there and listen to some other guy who’s trying to sell us the business or get a commission on it tell us what the future’s going to be… it’s very naïve,” Buffett said.
To further make his point clearer, he added, “We had a line in the report one time, “Don’t ask the barber whether you need a haircut.” And it’s quite applicable to projections of — by sellers — of businesses.”
Buffett has promised to donate over 99% of his wealth and so far he has given more than $48 billion, mostly to the Gates Foundation and his kids’ foundations.
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