An Investing Legend Retires
Although a legend in his own right, we are not referring to Charter Oak’s own Gene Akerberg, who still provides our clients with excellent tax advice and guidance, but rather the Oracle of Omaha Mr. Warren Buffett. At the annual Berkshire Hathaway Shareholders Meeting on May 3, Buffett surprised the audience and his hand-picked successor, Greg Abel, by announcing that he was retiring as CEO at the end of the year. The 94-years-young, Buffett, after receiving a prolonged standing ovation, showed his humility and that he is as sharp as ever by replying, “That ovation could be taken one of two ways!” We are sure it was a show of immense gratitude, not applause for Buffett finally retiring.
Buffett is a true legend in the investing world. Many of his investing tenets are held in high regard at Charter Oak, so looking back on his career and the lessons investors can learn from it seems fitting.
Warren Buffett and Berkshire Hathaway
Buffett has a remarkable investing history spanning several decades. His investment philosophy is rooted in value investing, a concept he learned from his mentor Benjamin Graham at Columbia Business School.
In the 1950s Buffett started his first investment partnership, which yielded impressive returns. By 1965 he had taken control of Berkshire Hathaway, a struggling textile manufacturing company. Under his leadership, he transformed Berkshire Hathaway into a diversified conglomerate, investing in various industries including insurance, consumer goods, and utilities. Some of the iconic companies that are part of Berkshire Hathaway include Dairy Queen, Fruit of the Loom, NetJets, and Geico Insurance, to name a few. He has also invested significantly in Apple, Bank of America, Coca-Cola, and other large corporations.
Buffett is known for his long-term investment strategies and preference for companies with strong fundamentals. He emphasizes the importance of company management and an economic moat, or a competitive advantage that protects a company from rivals.
Buffett has remained committed to his principles of ethics and philanthropy throughout his career. He famously pledged to give a significant portion of his wealth to charitable causes. His annual letters to Berkshire Hathaway shareholders are widely read and provide insight into his investment philosophy and economic outlook.
Buffett's success has made him one of the wealthiest individuals in the world, and he continues to be a respected figure in the investment community, inspiring countless investors with his wisdom and approach to investing.
Warren Buffett Investment Quotes
He has many often-cited investment quotes. While many are there for the headlines, the principles behind them hold, especially in markets like we are now experiencing.
On Long-Term Thinking
"Our favorite holding period is forever."
"The stock market is designed to transfer money from the active to the patient."
"Someone's sitting in the shade today because someone planted a tree a long time ago."
Investing in volatile and uncertain markets can be scary and challenging. But we must remind ourselves that we are long-term stewards of your investments, and patience is key. While we do not know what tomorrow will bring, we know that U.S. Companies have adapted and created wealth for their owners over the long term. The chart below illustrates this. If we review a 60/40 balance portfolio, we may have 1 year of negative returns, but as our investment time horizon grows, so does our probability of positive returns.
On Market Volatility
"Be fearful when others are greedy, and greedy when others are fearful."
"It’s only when the tide goes out that you learn who has been swimming naked."
Two investment quotes have held true over decades of investing. When all the experts and market pundits are warning of dire returns and that this time is truly different, we often get our best returns. Investing when everyone is heading for the exits can be scary, but fear frequently provides opportunity.
On Simplicity
"Never invest in a business you cannot understand."
"You only have to do a very few things right in your life so long as you don’t do too many things wrong."
We remind ourselves of this quite frequently at Charter Oak. New investment products are constantly created, and people are touting new and better investment methods. But we hold to our belief that if we can’t understand the investment merits of something, it is not appropriate for our clients. There are many tales of investors chasing the new, exciting investment only to have it fail to provide what it promised. Most of us can remember the mortgage products that led to the financial crisis in 2008, or the hedge fund Long Term Capital almost sinking the markets in the 1980s, or possibly Bitcoin today? Thank you, Warren. Your investment ideas keep us grounded and serve as great wisdom in stressful economic times.
As always, it is our pleasure to serve our clients every day. Please get in touch with your Charter Oak Financial Advisor with any questions.
Charter Oak Spotlight
We are celebrating some exciting Charter Oak news in our first edition of the Charter Oak Spotlight. In March, we celebrated 20 years as a Registered Investment Advisor (RIA), known today as Charter Oak Capital Management. What is now Charter Oak was originally Troiano & Associates, established in 1992 until we became RIA in 2005. Now, with 25 employees and offices in Portsmouth, NH, and Kennebunk, ME, we continue to help clients navigate transitions to live their best lives through comprehensive financial planning, behavioral coaching, and investment management.
Meet Jennifer Hartley, Charter Oak’s newest Administrative Associate. Jennifer joined the Charter Oak family in the fall of 2024 as an Administrative Associate in the Portsmouth, NH office, taking over for Taylor Auty who transitioned into a new role as Client Service Assistant. Jennifer manages various administrative tasks, keeps the office running smoothly and organized, and delivers exceptional client service. She helps arrange client appointments, triages client questions and inquiries, and greets everyone who comes through the front door with a smile. Welcome, Jennifer!