Warren Buffett
Warren Buffett (born 1930) is the chairman of Berkshire Hathaway and widely considered the most successful investor of the modern era. His approach to investing is deeply rooted in mental models.
Buffett learned value investing from Benjamin Graham, who taught him the importance of Margin of Safety — buying assets for less than their intrinsic value to leave room for error.
Key Ideas
- Circle of Competence: Buffett and Charlie Munger famously avoid investments outside their circle. "Risk comes from not knowing what you're doing."
- Long-term thinking: Buffett's preferred holding period is "forever," which requires deep Second Order Thinking about how businesses evolve over decades.
- Patience and discipline: Rather than predicting the future precisely, Buffett uses Probabilistic Thinking to find situations where the odds are overwhelmingly in his favor.
Buffett's partnership with Munger shows the power of combining perspectives — two overlapping but distinct circles of competence producing better decisions together.