Warren Buffett Has Never Made An Emotional Decision In Berkshire's History – He Says, 'Be A No-Emotion Person In Business'

During Berkshire Hathaway Inc.'s annual shareholder meeting, CEO Warren Buffett shared his insights on how he became one of the world's most respected investors.

One crucial lesson he emphasized was the need to remain rational and unswayed by emotions when it comes to matters of business. Seeking confirmation, Buffett turned to his partner and right-hand man Charlie Munger and asked, "Have we ever made an emotional decision?"

In his characteristically dry manner, Munger promptly replied, "No." 

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According to Buffett, he never allows emotions to dictate his investment decisions. Munger concurred.

"I can't recall any time in the history of Berkshire that we made an emotional decision," Buffett stated. "You don't want to be a no-emotion person in all of your life, but you definitely want to be a no-emotion person when making an investment or business decision." 

This approach has proven successful for Berkshire Hathaway over the years — the company has a value of over $740 billion as of July. Since 1965, Buffett has achieved an average annual return of 20% with Berkshire. Before that, his partnership, initiated in 1957, boasted an average return of 31% with no losing years.

Buffett is renowned for his value-oriented investment philosophy, which entails purchasing and holding a core portfolio of high-quality companies over extended periods. Bank of America Corp. BAC, Apple Inc. AAPL, The Coca-Cola Co. KO, and American Express Co. AXP represent some of Berkshire's prominent holdings. 

Buffett focuses on finding exceptional companies that have strong foundations and competitive advantages. He looks for enterprises with capable leaders, well-established brands, steady profits and a history of generating significant cash flows. 

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By investing in companies at their earliest stages without being driven by emotions, people have the chance to explore diverse industries ranging from technology to healthcare and identify great potential. This strategy, thanks to changes in federal law, has even been adopted by retail investors recently. Platforms like StartEngine and Wefunder allow anyone to invest in early-stage companies and invest in startups and businesses at their earliest stages, then hold for the long-term. This allows investors to support and potentially benefit from the growth and success of these startups as they tackle new and exciting challenges across various industries. 

Munger, Buffett's steadfast business partner, acknowledged the significance of eliminating emotional biases from the decision-making process. Later in the meeting, he expressed concerns over the increasing challenges that value investors may encounter in the future.

"I think value investors are going to have a harder time now that there's so many of them competing for a diminished bunch of opportunities," Munger said. "My advice to value investors is to get used to making less."

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