Warren Buffett didn't become one of the world's greatest investors by chasing the latest trends or reacting to short-term market noise.
Instead, the Oracle of Omaha built his fortune by owning high-quality businesses, buying them at sensible prices, and then letting time and compounding do the heavy lifting.
That approach translates surprisingly well to the Australian share market.
While the ASX doesn't have as many global giants as the US, it does offer a handful of businesses with strong competitive advantages, resilient earnings, and the ability to grow shareholder value steadily over decades.
If I were building an ASX portfolio today with a 20-year horizon, Buffett's playbook would be front and centre.
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Start with businesses that have competitive advantages
One of Buffett's most famous principles is the idea of an economic moat. He looks for stocks that competitors struggle to displace, whether through brand strength, scale, regulation, or switching costs.
On the ASX, REA Group Ltd (ASX: REA) stands out as a textbook example. Its dominant position in property listings is extremely difficult to replicate, gives it strong pricing power, and allows it to grow earnings year after year.
Buffett favours companies that can raise prices without losing customers.
Woolworths Group Ltd (ASX: WOW) also fits neatly into this category. Supermarkets aren't exciting, but they are vital. Woolworths benefits from scale advantages, strong supplier relationships, and a brand Australians trust. Over time, those qualities translate into reliable cash flows and steady compounding, even through economic cycles.
Don't ignore financial strength
Another quality that Buffett looks for is balance sheet strength and sensible capital allocation. Companies that manage debt carefully and reinvest profits wisely tend to survive downturns and emerge stronger.
Macquarie Group Ltd (ASX: MQG) ticks this box. Its diversified global operations, disciplined risk management, and ability to generate earnings across market environments give it a resilience few financials can match. While its profits can fluctuate year to year, its long-term growth record aligns closely with Buffett's preference for well-run financial businesses.
Think in decades
Perhaps the most important part of Buffett's strategy is patience. He famously says his favourite holding period is forever.
Building an ASX share portfolio for the next 20 years means accepting volatility along the way while staying focused on business quality rather than share price movements.
By owning stocks with strong moats, pricing power, and talented management, investors give themselves the best chance of letting compounding work its magic. And history shows it is one of the most reliable ways to build lasting wealth.
Foolish takeaway
You don't need to reinvent the wheel to succeed in the share market. By borrowing Warren Buffett's principles and applying them thoughtfully to high-quality ASX shares, investors can build a portfolio designed to grow for decades to come.
