According to Forbes, Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett is the sixth-richest man in the world, with an astounding net worth of nearly $93.5 billion.

How do you think he got there?

Tenacity, practicality, and a real hunger for more.

Buffett, arguably the world's most famous investor, has been investing since he was 11 years old. Buffett told a family friend when he was 13 that if he didn't become a millionaire by 30, he would leap off the highest building in Omaha, Nebraska.

Buffett enrolled at Columbia College at age 20 after learning that two renowned security experts, Ben Graham and David Dodd, worked there. He soon realized that Graham was a member of the GEICO insurance board of directors. Buffett showed off his scrappy side by showing up at GEICO headquarters uninvited and knocking on doors until a janitor allowed him in.

He found Lorimer Davidson, an executive at the time, and the two went on to talk about business and insurance for hours. Buffett was so enthusiastic about the conversation and the company's prospects that he put 65% of his savings into GEICO stock, which developed into a sizable fortune.

Now, Buffett owns GEICO insurance – talk about tenacity.

That was just the beginning of his journey as an investor, here are 10 insights Buffett has shared during his years of buying and selling stocks and businesses.

Thoughts on Holding cash

“We would never have cash around, just to have cash. I mean, we would never think that we should have a cash position of X% — these asset allocation things that tacticians in Wall Street put out, you know, about 60% stocks, and 30% [bonds] — we think that's total nonsense. We want to have all of our money working in decent businesses. We want money employed, but we would never employ it just to employ it. You will find us quite unhappy over time if cash just keeps building up.”

Market conditions

“We never have an opinion about the markets. It wouldn’t be any good, and it might interfere with the opinions we have that are good. If we think a business is attractive, it would be very foolish for us to not take action on that because we thought [about] something the market was going to do or anything of that sort. To give up something that you do know and that is profitable, for something that you don’t know and won’t know – it doesn’t make any sense to us.”

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Diversification

“We like to put a lot of money into things we feel strongly about. We think diversification as practice makes very little sense for anyone that knows what they’re doing. Diversification is a protection against ignorance. If you want to make sure nothing bad happens to you, relative to the market, you own everything. This is a sound approach for someone who does not feel they know how to analyze businesses. If you do know how to analyze businesses, it’s crazy to own 50 stocks or 40 stocks. It’s a confession, in our view, that you do not understand the business you’re investing in. Three wonderful businesses, it’s more than you need in this life to do very well.”

Risk

“Volatility does not measure risk. And, the problem is that the people who have written and taught about risk do not know how to measure risk. The nice thing about Beta, which is a measure of volatility, is that it is nice and mathematical, and wrong in terms of measuring risk. Risk comes from the nature of certain kinds of businesses. It can be risky to be in some business just by the simple economics of that type of business you’re in. And, it comes from not knowing what you’re doing.”

High IQ

“It’s a temperamental quality, not an intellectual quality. You don’t need tons of IQ to be in this business, you don’t need to be playing three-dimensional chess, or be in the top leagues in terms of bridge playing or something of the sort. You need a stable personality, and a temperament that neither derives great pleasure from being with the crowd, or against the crowd. This is not a business where you take polls, it’s a business where you think.”

Best investment

“By far, the best investment you can make is in yourself. For example, communication skills; I tell those students that are going to graduate schools, and business schools, and [students who] do all these complicated formulas, that if they just learned to communicate better, both in writing and in person, they increase their value by at least 50% — If you can’t communicate, it’s like winking at a girl in the dark; nothing happens. If you invest in yourself, nobody can take that away from you.”

Asset allocation

“We think the best way to minimize risk is to think. What you ought to do is have your default position in short-term instruments, and whenever you see anything intelligent to do, you should do it. So much of what you see, when it comes to asset allocation, it’s just merchandising. It’s a way to make you think that if you don’t know how to determine if [your position] should be 60/40, or 65/35, you need [financial advisors] to help you. And you don’t need that at all in investing.”

Day trading

“Desire of people to gamble, and they gamble in stock incidentally, too. Day trading, I would say, very often came close to gambling as defined. The human propensity to gamble is huge. As states learned what a great source of revenue gambling was, they began making it easier to gamble. And, believe me, the easier it is made, the more people will gamble.”

Growth stocks

“Growth and value are indistinguishable – they’re both parts of the same equation, or really, growth is part of the value equation. Our position is that there is no such thing as a growth stock or a value stock. Growth usually is a positive for value, but only when it means that by adding capital now, you add more cash availability later on, at a rate that’s considerably higher than the current rate of interest. Anyone that tells you to put your money in growth stocks, or value stocks, really does not understand investing.”

Don’t wait for a correction

“In general terms, unless you find the prices of a great company really offensive – you really want to go along with the idea of something that if you were going to take a trip for 20 years, you wouldn’t feel bad leaving the money with no orders, with no brokers, and no power of attorney or anything. You just go on the trip, and you come back knowing it’s still going to be a strong company.”

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