7 timeless investment lessons from Warren Buffett

Reflecting on his early years at Berkshire, Buffett admitted, "Though the price I paid for Berkshire looked cheap, its business – a large northern textile operation – was headed for extinction."

The lesson: invest where your understanding and discipline give you an edge, not where others dictate terms.

Buffett learned the hard way that overpaying can be costly. On buying General Re in 1998: "My error caused Berkshire shareholders to give far more than they received."

Cash transactions keep risk under control, especially for major acquisitions.

Buffett loved a dual strategy: buy stakes in great listed companies and acquire whole businesses when possible. His witty analogy: "Woody Allen once explained why eclecticism works: ‘The real advantage of being bisexual is that it doubles your chances for a date on Saturday night.’"

Diversifying approaches can double your opportunities.

"Be fearful when others are greedy and greedy only when others are fearful." Buffett reminded investors that emotional extremes in markets create both risk and opportunity.

On acquisitions, Buffett warned, "When such a CEO is encouraged by his advisers to make deals, he responds much as would a teenage boy who is encouraged by his father to have a normal sex life." 

Buffett’s long-term mindset emphasises readiness: "When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons."

Using Geico and catastrophe insurance as examples, Buffett said: "It’s only when the tide goes out that you learn who’s been swimming naked."