Warren Buffett: If I Had $10,000 To Invest Today

During the 1999 Berkshire Hathaway Annual Meeting, Warren Buffett discussed the importance of starting young in investing, comparing the process to rolling a snowball down a long hill, where compound interest plays a key role.

He advises focusing on smaller companies for those starting with limited funds, as they are often overlooked. Successful investing, according to Buffett, requires independent thinking, buying good businesses at attractive prices, and not relying on others for tips.

He shares an example from 1951 when he discovered GEICO but was dismissed by prominent investment firms. Buffett stresses the need to trust one’s own knowledge and act decisively when opportunities arise.

Here’s an excerpt from the meeting:

Buffett: Start young. (Laughter) Charlie’s always said that the big thing about it is we started building this little snowball on top of a very long hill. So we started at a very early age in rolling the snowball down.

And, of course, the snowball — the nature of compound interest is it behaves like a snowball of sticky snow. And the trick is to have a very long hill, which means either starting very young or living very — to be very old.

The — you know, I would do it exactly the same way if I were doing it in the investment world. I mean, if I were getting out of school today and I had $10,000 to invest, I’d start with the A’s. I would start going right through companies.

And I probably would focus on smaller companies, because that would be working with smaller sums and there’s more chance that something is overlooked in that arena. And, as Charlie has said earlier, it won’t be like doing that in 1951 when you could leaf through and find all kinds of things that just leapt off the page at you. But that’s the only way to do it.

I mean, you have to buy businesses and you — or little pieces of businesses called stocks — and you have to buy them at attractive prices, and you have to buy into good businesses.

And that advice will be the same a hundred years from now, in terms of investing. That’s what it’s all about. And you can’t expect anybody else to do it for you. I mean, people will not tell — they will not tell you about wonderful little investments.

There’s — it’s not the way the investment business is set up. When I first visited GEICO in January of 1951, I went back to Columbia. And I — that rest of that year, I subsequently went down to Blythe and Company and, actually, to one other firm that was a leading — Geyer & Co. — that was a leading analyst in insurance.

And, you know, I thought I’d discovered this wonderful thing and I’d see what these great investment houses that specialized in insurance stocks said. And they said I didn’t know what I was talking about. You know, they — it wasn’t of any interest to them.

You’ve got to follow your own — you know, you’ve got to learn what you know and what you don’t know. Within the arena of what you know, you have to just — you have to pursue it very vigorously and act on it when you find it.

And you can’t look around for people to agree with you. You can’t look around for people to even know what you’re talking about. You know, you have to think for yourself. And if you do, you’ll find things.

You can find the entire meeting here: