Warren Buffett’s 25 Most Important Investments Ever (RANKED!)

TL;DR

Warren Buffett’s most important investments are ranked by how strongly he committed at the time, not simply by their eventual returns. The list includes Disney at number 25, The Washington Post at number 24, and Scott Fetzer at number 23, while his roughly $36 billion Apple investment does not appear. Read on for the purchase figures, investment rationales, outcomes, and lessons behind these defining decisions.

Transcript

In this video, you will learn about the top 25 most important investment decisions that Warren Buffett, the greatest investor of all time, has ever made. The deals that made him a legend and a billionaire. For anyone interested in understanding Buffett’s investment strategies, it is essential to know about these deals. And I think you might be surp... Read More

Key Insights

• ✊ Buffett's investments focused on acquiring quality companies with strong brands, pricing power, and competent management.
• 🖐️ Timing played a crucial role in Buffett's investments, with many purchases made during periods of undervaluation or market downturns.
• 🥹 Buffett's willingness to hold onto investments for the long term helped maximize returns and capture the compounding effect.
• 💗 Berkshire Hathaway emerged as Buffett's most significant investment, growing into a multi-billion dollar conglomerate through strategic acquisitions and disciplined capital allocation.
• 👨‍💼 Buffett's investments demonstrate the importance of patience, selecting businesses with enduring competitive advantages, and avoiding overpaying for assets.
• ⏯️ Float, or the use of insurance premiums to generate investment income, played a significant role in enhancing Berkshire Hathaway's returns.
• 💱 Buffett's ability to adapt and recognize the changing dynamics in industries and markets contributed to his investment success.
• 🍉 Buffett's investments showcased his preference for dealmaking based on intrinsic value and long-term prospects rather than short-term market movements.
• 🥹 Buffett's approach to investing focused on finding undervalued assets, often referred to as "bargains," and holding them for the long term.

Questions & Answers

Q: What were Warren Buffett’s most important investments, and how were they ranked?

The ranking covers 25 investment decisions and weighs how much Buffett committed relative to his wealth at the time of purchase. It includes both good and bad outcomes to avoid hindsight bias; the excerpt identifies Disney at number 25, The Washington Post at number 24, and Scott Fetzer at number 23.

Q: Why is Warren Buffett’s Apple investment not among the top 25?

Buffett invested about $36 billion in Apple, but the investment does not appear on this list. The ranking measures his conviction through the size of each commitment relative to his wealth at the time, rather than ranking deals by their absolute dollar amount.

Q: Why did Warren Buffett invest in Disney in 1966?

Buffett valued Disney’s ability to recycle its assets through remakes and sequels for new generations of children, while characters such as Mickey Mouse kept actor costs down. He also believed the company was fairly priced, with a $90 million market capitalization and $11 million in earnings.

Q: How much did Warren Buffett invest in Disney, and what return did he earn?

Buffett Partnership Limited spent $4 million for about 5% of Disney, representing roughly 9% of Buffett’s net worth at the time. Buffett sold the shares one year later for 48 cents each, earning a 55% return.

Q: What lesson did Buffett’s early sale of Disney illustrate?

The Disney investment showed the cost of selling a wonderful company too early, even after a substantial short-term gain. Buffett earned 55%, but the transcript notes that the stock later traded at $131 and connects the experience to his preference for holding great companies for the long term.

Q: Why did Warren Buffett invest in The Washington Post?

Buffett saw dominant city newspapers in the 1970s as near-monopolies with exceptional pricing power over readers and advertisers. He also considered the company cheap after its valuation fell from about $180 million to $110 million in a short period.

Q: How did Berkshire Hathaway’s investment in The Washington Post perform?

Berkshire bought a 9% stake for $10.6 million in 1973, when the company had a market capitalization of about $110 million and a P/E ratio of 11. The stake reached $1.7 billion in value in 2005, and Buffett sold it in 2014 for $740 million after the internet damaged the newspaper industry.

Q: Why did Berkshire Hathaway acquire Scott Fetzer?

Scott Fetzer’s two largest operations, World Book and Kirby, generated more than 50% of its earnings, and the company earned $40.6 million in 1984. Berkshire bought the entire business for $315 million on January 1, 1986, at a P/E ratio of about 8; Scott Fetzer then distributed $1 billion in dividends to Berkshire during its first 15 years of ownership.

Summary & Key Takeaways

• Warren Buffett's top 25 investments have played a crucial role in his financial success and wealth accumulation.

• These investments include various industries such as media, insurance, food, and finance.

• Buffett's approach to investing focused on buying quality companies with strong management and favorable valuations, while also considering the potential for long-term growth.