Billionaire money manager and investment guru Warren Buffett gave students at the University of Georgia’s Business school some evergreen advice on seizing opportunities, using the “20 slot punch card” method.
The ‘Oracle of Omaha’ known for his long-hold approach to stocks, sticking to the fundamentals, and taking risk calculated, but aware choices, gave the address in 2001, but a clip of the address has gained virality on social media again.
What did Warren Buffett say on seizing big opportunities?
Explaining that big opportunities are rare and must be grabbed, the Berkshire Hathaway chief, due to step down this year-end, emphasised, “Big opportunities in life have to be seized. We don’t do very many things, but when we get the chance to do something that’s right and big, we’ve got to do it.”
He further added that taking up such opportunities in small measures, “is just as big of a mistake almost as not doing it at all”, noting that “you really got to grab them when they come, because you’re not going to get 500 great opportunities”.
Warren Buffett’s ‘20 slot punch card’ approach to investing
Giving students a guiding metric to use when making decisions, Warren Buffett said they would be better off thinking of opportunities marked on a punch card with 20 punches on it, where “every financial decision you made you used up a punch”.
He explained that using this approach, “You’d get very rich, because you’d think through very hard each one.” Adding that limited chances to invest, means that one would spend time thinking and weighing out the pros and cons instead of making rash and impulsive decisions.
‘Can’t make money’ with impulsive buys, says Buffett
“There’s a temptation to dabble – particularly during bull markets – and in stocks it’s so easy. It’s easier now than ever because you can do it online. You know you just click it in and maybe it goes up a point and you get excited about that and you buy another one the next day and so on. You can’t make any money over time doing that,” he added.
Warren Buffett believes that treating investment opportunities as only one punch card with only 20 punches during your lifetime would ensure, “you think a long time before every investment decision – and you would make good ones, and you’d make big ones. And you probably wouldn’t even use all 20 punches in your lifetime. But you wouldn’t need to.”
