A year after meeting Warren Buffett The value of time
Last winter, I was fortunate enough to attend a dinner with the world’s greatest investor — Warren Buffet. I was thrilled to meet Mr. Buffett, one of my icons. Little did I know it was going to be a life-changing encounter for me.
Justin Sun, founder of TRON had bid for and won lunch with the renowned Berkshire Hathaway CEO Warren Buffett at a charity auction. He kindly invited me to join the dinner in Buffett’s hometown of Omaha, Nebraska along with Litecoin creator Charlie Lee, CFO of Huobi, Chris Lee, and Head of the Binance Charity Foundation, Helen Hai.
I’ve been a fan of capital markets my entire life. I started investing at the age of 13 and I’ve built a global investment platform and yet, when I heard Buffett talk about investing, it stirred something in me. Multiple puzzle pieces I have assembled my entire life fell into place to create one clear image:
Investing can be simpler when you invest in businesses you understand and believe in. If you follow the rules of value investing over a long period of time, you can succeed as an investor.
I was planning another visit to Omaha for the Berkshire Hathaway annual meeting in early May 2020, which naturally did not actually happen. The following month after the Omaha dinner, the world began to change in ways none of us could have imagined. Amid the turmoil of a global pandemic and the unprecedented market reaction, Warren Buffett’s view of investing as he explained to us that evening, remained crystal clear. A year later, as the world begins to recover, these truths remain key in understanding the logic behind investing.
One of Warren Buffett’s sayings that most resonated with me was: “Interest rates are to asset prices what gravity is to the apple. When there are low interest rates, there is a very low gravitational pull on asset prices.” This conviction is very relevant today. We live in an era of low, zero or even negative interest rates. This hasn’t changed since 2008, and is unlikely to change in the near future.
Another important piece of advice of Warren Buffett is: “Buy into a company because you want to own it, not because you want the stock to go up.” This is one of the basic concepts of value investing. Benjamin Graham explained it seven decades ago in his book, The Intelligent Investor, and it remains just as relevant today. This new generation of retail investors is characterized by their tendency to buy shares of companies they know and whose products they use. Anyone contemplating investing in Apple, Tesla, GameStop or any other stock — should do so based on an understanding of the company, its products, management and value. The same principle applies to investing in crypto, of course.
eToro provides certificates for some Popular Investors, formally identifying them as “Value Investors.” Value investors buy businesses, not stocks and plan for the long term. They do not base their decisions on speculative assumptions but on deep quantitative and qualitative research on every company which they buy. Value investors seek to pay low prices for good, growing businesses.
Last week, Mr. Buffett shared his annual letter to Berkshire Hathaway shareholders. One of the greatest lessons that can be learned by reading it is the importance of the compounding interest effect and the time in the market.
In addition, a special paragraph caught my attention: “Success stories abound throughout America. Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.” These highlighted lines are relevant for so many of our global Popular Investors and their followers who have experienced success. I find eToro’s vision and story depicted in these lines. As a global company, we have provided access to the traditional investment world, thus, creating a new alternative for the retail investor, and for anyone interested in participating in the global markets.
Since the beginning of 2021, more than two million new users have joined eToro and we now have more than 19 million registered users. Perhaps the most valuable piece of advice from Warren Buffett that I can share with you is: “The most important investment you can make is in yourself.” I invite you to study, read and follow the ideas and thoughts others share on our platform. Learn about the psychology of investing and the approaches that best suit you. Remain curious and open to different opinions, and to the wisdom that’s out there.
And most important of all, enjoy the journey.
Yoni Assia is eToro Co-Founder and CEO
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