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At the end of this month, billionaire investor will step out of the chief executive role at Berkshire Hathaway.
That does not mean the legendary stock picker is retiring. He still plans to be chair once the clocks ring in 2026.
In 2026 – and likely far beyond – I plan to apply some classic Warren Buffett thinking to my own investments. Here are three examples.
Looking for a business moat
Some people buy shares just because they think the price will move up. Others simply look at shares that have fallen badly and bank on a recovery.
But sometimes, shares fall for a good reason – and their price never recovers.
Warren Buffett is not averse to buying cheap shares. Indeed, that helps explain much of his success over the decades as an investor.
But when looking for shares to buy, he does not just look at price. He also carefully considers a company’s business model and asks what sort of “moat” it has.
As with medieval castles, a moat in this context is something that helps protect a business from its rivals.
Think of Warren Buffett’s investment in Apple (NASDAQ: AAPL) as an illustration. From its strong brand to its user ecosystem, the tech giant has plenty of competitive advantages that together constitute a sizeable moat.
Focusing on the long term
Will Apple have a good 2026, thanks to its large installer user base and proven business model?
Or might the share price — up 11% this year — fall, as weakening economies and growing smartphone competition threaten its sales of pricey products?
I do not know. But I also think the bigger question for investors is not what happens to Apple in coming months, but rather over the next decade or more.
That is because, like Warren Buffett, I take a long-term approach to investing.
Berkshire has done tremendously well from its Apple holding. It still owns a sizeable stake, albeit smaller than several years back.
Buffett’s approach to Apple, as with so much of his investing, has always been to ignore short-term noise and focus on the long-term investment case. I aim to do the same.
Staying diversified
What will happen to Apple? Nobody knows – including Warren Buffett.
It remains a significant element of Berkshire’s share portfolio.
But, crucially, it is only one of the company’s holdings. Buffett is a smart enough investor to know that, no matter how brilliant a company may be, it is possible to have too much of a good thing. Even the best business can run into unexpected challenges.
From an investing perspective, that means that smart investors stay diversified.
That is not just something for wealthy investors with large sums to invest. Even on a small scale, diversification is possible – and an important risk management tool.
