2 Simple Investing Rules from Warren Buffett’s 2024 Shareholder Letter
Ignore at Your Own Risk
Dear CMQ Investors,
Every year, Warren Buffett’s shareholder letter delivers hard-earned wisdom on investing, business, and decision-making. The 2024 letter is no exception.
I just finished reading Buffett’s latest letter and two key lessons stood out:
1️⃣ Mistakes are inevitable. The best investors admit them and fix them fast.
Buffett openly acknowledges past misjudgments—whether it’s picking the wrong businesses or hiring the wrong managers. The worst move? Failing to promptly correct your bad decision.
The cardinal sin is delaying the correction of mistakes or what Charlie Munger called “thumb-sucking.” Problems, he would tell me, cannot be wished away. They require action, however uncomfortable that may be. —Warren Buffett
2️⃣ One great investment can change everything.
Avoiding mistakes alone won’t make you a fortune. You have to make a few great decisions along the way.
Buffett’s career proves that a few outstanding decisions—GEICO, Ajit Jain, Charlie Munger—shaped Berkshire’s success.
And our experience is that a single winning decision can make a breathtaking difference over time. (Think GEICO as a business decision, Ajit Jain as a managerial decision and my luck in finding Charlie Munger as a one-of-a-kind partner, personal advisor and steadfast friend.) Mistakes fade away; winners can forever blossom. —Warren Buffett
This reminds me of one of the best lessons I’ve learned from Warren Buffett i.e. you only need to find a few great businesses to get very rich.
🎯 My goal is to make the wisdom usable for you. Here’s how you can apply it.
Acknowledge mistakes early. Whether it’s a bad stock pick or a wrong strategy, move fast to correct it.
Cut losers, let winners run. A great investment more than makes up for the losers over time.
Don’t be afraid to admit you're wrong. The best investors learn from mistakes instead of hiding them.
Focus on asymmetric opportunities. A single outstanding investment can carry your portfolio.
Talk about your mistakes. Charlie Munger said it best: “I know I’ll perform better in life if I’m constantly rubbing my own nose in my own previous mistakes. That’s a wonderful trick. I cannot recommend it enough.”
Thank you for supporting CMQ Investing as a subscriber.
Sincerely,
Chris Franco
P.S. Follow me on X for more real-time updates about investing.
Thanks for thinking of us poors!!!! In cathie wood we belieeeevvvveee!!!!