When Warren Buffett stepped down as CEO of diversified holding company Berkshire Hathaway on 31 December, he was a remarkable 95 years old.
After spearheading Berkshire Hathaway for some 60 years, he handed the reins over to Greg Abel, who's been with the company since 1999.
But Buffett, being the man that he is, still keeps his finger on the market's pulse, working from the company office and advising Abel.
What you may not know is that Warren Buffett started his career with very little money. But by the 1980s he'd notched up his first billion dollars. And, as of January this year, he was reported to be worth almost US$149 billion.
With that astonishing success in mind, here are three golden investing rules immortalised by the Oracle of Omaha that we would all do well to keep in mind.
Image source: The Motley Fool
Why Warren Buffett advises patience
While it's tempting to believe we can out think our fellow investors, the reality is that timing the market correctly is very difficult, and requires more than a bit of luck.
Indeed, I'm not aware of a single investor who has managed to consistently time their entry and exits into the market correctly over the long-term.
And when it comes to the billions of dollars Warren Buffett amassed over the years, day trading certainly wasn't part of his strategy.
"The stock market is designed to transfer money from the active to the patient," he famously opined.
Which ties into this Buffett investing nugget, "I don't invest to make a quick profit. I buy stocks with the mindset that the market might shut down tomorrow and stay closed for five years."
So, the next time you're tempted to buy or sell an ASX share simply because it's getting a lot of media attention or has made some big daily moves, you may want to think again.
Instead look for quality companies, with sizeable barriers to competitor entry and solid long-term growth potential.
And then be patient.
Stick with the things that you know
Warren Buffett is also well known for avoiding investing in companies or assets that he doesn't understand. That's one of the reasons he never bought into the crypto markets.
"You don't have to be smart, as long as you stick to what you know," Buffett said.
Now we all have our different areas of expertise. So, if you think you understand global crypto markets, that doesn't mean you should steer clear as well.
But according to the Oracle of Omaha, you should only invest in a sector or company if you understand how it works.
Invest in ASX shares providing real world value
The best investments, Warren Buffet advises, provide real world value, not just market value.
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price," he said.
Again, don't let yourself join the herd in snapping up ASX shares that are the market darlings of the hour.
Instead look for companies with great brands, a strong proven management team, and the ability to control prices.
