Warren Buffett has long been renowned in the investment world. With a net worth of around $158 billion, he has become the most outstanding and profitable investor globally, thanks to his precise timing and knack for predicting the best buying opportunities. Despite Buffett announcing his plan to retire by the end of 2025 (at the age of 95), his influence on investment strategies remains significant.
Leading Berkshire Hathaway for the past 59 years, this billionaire has consistently outperformed the market, showcasing his ability to select quality stocks and achieve investment success. He has proven this time and time again, investing in numerous stocks that have helped Berkshire Hathaway achieve nearly a 20% annual compounded return during this period, compared to the S&P 500 index’s approximately 10% annual compounded return.
To achieve such success, Buffett follows some simple principles. He only invests in companies he understands, buys stocks at reasonable prices, and holds them long-term. Most importantly, whether in a bull market or a bear market, Buffett does not blindly follow trends or go with the flow. Instead, this investment expert invests based on market conditions whenever he identifies opportunities.
Given this, is there anything he is unwilling to invest in? Indeed, there is. Buffett instinctively knows when to hedge his bets. If you want to follow his financial advice in investments, consider the four industries that Buffett typically avoids, as compiled by the financial website Gobankingrate.
It is well known that Buffett steers clear of investing in emerging technologies. For example, he has referred to Bitcoin as a “mirage” and warned investors to stay away.
However, despite Buffett’s skepticism towards cryptocurrencies, Berkshire Hathaway did invest in Nu Holdings, a Brazilian digital bank providing a cryptocurrency platform including Bitcoin. From a technical perspective, Berkshire Hathaway did indirectly benefit from the cryptocurrency market.
Buffett’s aversion to new technology, in the long run, works to his advantage as he tends to invest in companies with high certainty. This usually reduces risks since he relies on his judgment of each company’s future earnings and value rather than others’ opinions.
Buffett also shows no interest in investing in precious metals. Just like his view on technology, he seems to believe that the value of gold is not sufficient for him to take the risk, being one of the biggest skeptics of gold. Although Berkshire Hathaway unexpectedly entered the gold mining industry in 2020, it was short-lived, reflecting Buffett’s views on the matter.
In summary, he believes that gold investors may preserve value, but investors in productive assets have traditionally received more dividends over the years.
Berkshire Hathaway has previously invested in airlines. For instance, they spent $10 billion acquiring stakes in Delta Air Lines, American Airlines, United Airlines, and Southwest Airlines, among others, but sold these shares just four years later in 2020, largely due to the pandemic’s impact, an action likely supported by Buffett as the airline industry has been one of his criticized sectors. By 2025, he no longer held any airline stocks.
Six years ago, Buffett disastrously invested in ConocoPhillips.
According to Yahoo Finance’s Eric Fontinelle, Buffett’s reasoning was likely due to the expectation of rising oil prices. “With crude oil prices well above $100 per barrel at the time, oil company stocks soared,” Fontinelle wrote, “However, it turned out to be a terrible investment.”
This time, Buffett did not choose the wrong stock but the wrong price. Berkshire Hathaway bought in at high stock prices, resulting in the company losing billions of dollars.
Ultimately, one of the fundamental principles of investment is to remain vigilant against emotions. As Buffett says, “In investing, pessimism is your friend, euphoria the enemy.”
While Buffett is not particularly keen on industries like technology, he is not entirely averse to trends and new things. Although he has invested in innovative products, to this day, Buffett still seems to value certainty over excitement.
(Note: This article is for general informational purposes only and does not intend to provide any recommendations. The Epoch Times does not offer investment, tax, legal, financial planning, real estate planning, or other personal finance advice. For specific investment matters, consult your financial advisor. The Epoch Times does not assume any investment responsibility.)