Warren Buffett is one the greatest investors of all time. He was also the unofficial financial advisor for a room full of Georgetown University student last week, as the Berkshire Hathaway (BRK.A) CEO and Bank of America (BAC) CEO Brian Moynihan publicly chatted about everything from income inequality to how to invest money.
The full video can be found here — and I would highly recommend taking an hour to watch the whole thing. Buffett is full of valuable insights for anyone who wants to learn how to invest money, understand more about the financial crisis or needs a reassurance that America is indeed great.
Warren Buffett is also full of clever quips, so the conversation is never a bore. For example: “I was born in 1930. And I was conceived in 1929 because my dad was a stock salesmen … and after the crash he didn’t have anything to do.”
Moynihan tosses out some advice on how to invest money as well. It’s pretty simple: Buy Bank of America.
For those who don’t want to sit through the whole chat but still want the financial advisor wisdom of Warren Buffett, here are seven of his best tips for how to invest money and more — straight from the investing legend’s mouth:
Warren Buffett Tip #1: Start with a framework.
“I bought a book in 1949 by Ben Graham called ‘The Intelligent Investor.’ I don’t remember what I paid, but aside from what I paid for my two marriage licenses, that was the best investment I ever made … It’s very important to have the right framework. If you have the right philosophy, you will find opportunities.”
Warren Buffett Tip #2: It doesn’t take IQ.
“I tell people: If you’re going into the investment business and have a 160 IQ, sell 30 of it to someone else because you won’t need it. I figured out very early that you don’t have to be smart in this business, which is fortunate. But you have to have the right temperament, and you have to be able to ignore what other people are saying and simply look at the facts.”
Warren Buffett Tip #3: There will be more downturns.
“People will continue to make the same mistakes they’ve made … Humans all think they’re Cinderella at the ball. As the night goes along, the music gets better, the drinks flow — they all think they’re going to leave at 2 minutes to 12. And of course there are no clocks on the wall, and they’re still dancing … [so] we will have periodic recessions and we’ll have the occasional panic. Where [the next panic] will come from — who knows. “
Warren Buffett Tip #4: But they will breed opportunity.
“You will find opportunities as you go through the next 20, 30, 40, 50 years, and frankly, you’re most likely to find them in periods like five years ago when we were having the panic … It’ll happen again — but buy when it happens.”
Warren Buffett Tip #5: Less is more.
“It’s a terrible mistake to think you have to have an opinion on everything. I tell students: If when they got out of school, they got a punchcard with 20 punches on it and that’s all the investment decisions they got to make in their entire life, they would get very rich, because they would think very carefully about each one. And you don’t need 20 right decisions to get very rich. Four or five will probably do it over time.”
Warren Buffett Tip #6: Invest what you know.
“The most important thing in evaluating a company is to be able to define which ones you can come to an intelligent decision on and which ones are beyond your capacity to evaluate.”
Warren Buffett Tip #7: America works.
“If you look at the 20th century, we had two world wars, we had the Great Depression, we had the flu epidemic, we had the Cold War, we had the atom bomb, you name it. The Dow Jones Average went from 66 to 11,497. America works. If you seek America’s monument, look about you.”
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