The Wrong Start: An 11-Year-Old Boy Obsessed with Charts and Technical Analysis
In 1942, 11-year-old Warren Buffett pooled together $114.75 and bought three shares of Cities Service preferred stock. This was the moment when the man who would later accumulate over $100 billion in net worth first dipped his toes into the stock market.
But back then, Buffett was taking a completely wrong approach. He viewed stocks simply as "things that go up and down." He drew charts and devoured technical analysis books. He read Edwards and Magee's book over 100 times, and consumed every book he could find by authors like Garfield, Loo, and Alessandro.
For eight years, he believed that predicting stock movements was the most important thing. He tried to figure out how the stock market would move and when specific stocks would rise. It was the classic mindset of a technical analyst.
The Life-Changing Encounter: A Fateful Meeting with Benjamin Graham
Around age 19-20, Buffett encountered Benjamin Graham. Reading Graham's book "The Intelligent Investor" opened up a completely different world for him. At that moment, he realized he had been heading in entirely the wrong direction.
"From that moment on, I never bought another stock. Instead, I happened to buy a business that was publicly traded. I became a business owner."
This is the core of Buffett's investment philosophy. Instead of viewing stocks as mere pieces of paper or numbers, he shifted to the perspective of actually owning a piece of a real business. He stopped caring about how stocks would move tomorrow, next week, next month, or next year.
The Secret to Success: Love What You Do
Buffett believes that for long-term success, you must love what you do. Only when you enjoy your work can you find the motivation to keep going through difficult situations.
"I'm a reasonably intelligent person who is enormously interested in what I do. So I've devoted my life to it. And I've surrounded myself with people who bring out the best in me."
Interestingly, Buffett says his work doesn't require genius-level intelligence. An IQ of 120 is sufficient, and having 170 doesn't make you better than someone with 120 – it might even make you worse. What matters isn't brains but the right mindset.
What 90% of People Miss
According to Buffett, 90% of people who buy stocks approach it the wrong way. They hope their stocks will go up next week, feel good when the market rises, and feel bad when it falls.
But Buffett is the complete opposite. He feels better when stocks go down because he can buy more with the same amount of money. It's like a farmer hoping land prices will drop so he can buy more farmland.
"From March 11, 1942, until now, I've always had over 80% of my net worth invested in American businesses. You might call them stocks, but I think of them as American businesses."
The Perspective of Business Ownership, Not Investment
Buffett's core philosophy is to invest as if the stock market didn't exist. He approaches it with the mindset of actually owning a business, like buying a farm or an apartment building.
"People would be much better off if they really thought about buying businesses as if there were no stock market. When you buy a business, don't call it a stock."
He says truly important opportunities come once every 10 or 20 years. When those opportunities arise, you need to be able to act really intelligently. This applies regardless of what field you're in, where you live, or what you know.
America's Remarkable Growth
Buffett also offers amazing insights into America's economic development. Americans today have higher wealth and income levels than at any point in history. Even people in the bottom 2% of income earners live better lives than in the past.
What's even more remarkable is that ordinary people today – not the top 1% – live better lives than John D. Rockefeller, who was the world's richest man when Buffett was 6 years old. They have access to better healthcare, education, entertainment, and transportation.
"Rockefeller had to go to the game if he wanted to watch football. I can watch it at home on a big screen and even see replays. Not everyone has as big a screen as I do, but almost everyone has access to a screen, iPhone, or computer."
America's Miraculous Growth
Buffett views America's growth from a historical perspective. Just three generations ago, less than 0.5% of the world's population lived on this land. They didn't work harder than people in other countries, weren't smarter, and didn't bring gold with them.
But a few generations later, they now hold over 20% of the world's wealth. This is unprecedented in history.
"If you had gone to any of the delegates at the Constitutional Convention in 1789 and said, 'Let me tell you what this country will be like in three generations,' and told them that people would be flying through the air, enjoying all kinds of entertainment, and doing unimaginable things, they would have thought you were crazy."
Inventors like Thomas Edison made money, but their inventions ultimately became everyone's. Comparing what an hour of labor brought 100 years ago to what it brings today is truly unbelievable.
The True Source of Happiness
Two things bring Buffett the greatest happiness. First, the confidence that he will win over time. This doesn't mean beating other people, but rather that if you buy pieces of businesses with the right mindset, the game itself becomes very easy.
Second, earning people's trust. He might be able to make more money working alone, but he prefers working with partners.
Buffett's story goes beyond simple investment techniques. It encompasses a perspective on life, long-term thinking, and an understanding of true value. The journey from an 11-year-old boy who looked at charts and got caught up in stock fluctuations to a wise investor who sees through to the essence of business offers profound lessons for all of us.
Ultimately, Buffett's message is that successful investing doesn't come from complex techniques or genius-level intelligence, but from the right mindset, long-term perspective, and genuine love for what you do.