Weekly Buzz: Investing like Warren Buffett 💡

Warren Buffett is one of the biggest names in finance, and for good reason. With a $140 billion personal fortune built through decades of disciplined investing, his track record speaks volumes. A share in his firm, Berkshire Hathaway, traded at $290 in 1980 – today, that same share is worth over $300,000. And fortunately for us, Buffett has always been candid about his approach.

How does Buffett approach investing?

Warren Buffett is a value investor: he looks for businesses trading below their intrinsic value. Value lies in the company’s assets, a strong expectation of good earnings in future, and management that is competent and trustworthy. When he finds these companies, he buys a significant stake and holds onto it, often forever. And he's particularly critical of trading – buying shares simply because you think their price will rise in the short term isn't investing, he says, it's speculation.

Once invested, Buffett advocates holding for the long term, regardless of market fluctuations. In fact, when prices drop, it’s all you can eat for Buffett, often pouring more into his favourite companies.

He judges companies on several key factors: consistent performance with high profit margins and minimal debt is a good sign. He also seeks out businesses with defensible competitive advantages – what he calls "moats" – since these help companies thrive decades into the future. With Buffett’s nigh-on permanent investing horizon, that longevity matters.

What’s the takeaway here?

Buffett consistently reminds investors that they're business owners, not just stockholders. That’s important enough to reiterate: when you buy shares, you're not just purchasing a ticker symbol, you're becoming a partial owner of a real business with employees, products, and customers.

While Buffett's philosophy isn't particularly complicated, analysing individual companies like he does requires significant time and expertise. That's why he advocates a simpler approach for most investors: low-cost index funds. These give you ownership in hundreds of companies at once, providing exposure to overall market growth – a principle that our General Investing portfolios are built on.

📰 In Other News: Investor appetite for chips grows stronger

While semiconductors have been a hot topic throughout the last year, recent news has sparked something of a rally. Japan's Nikkei stock index surged 2% in a single session on Tuesday, while Korea’s KOSPI index surged by around 5% over the past week – driven largely by chip-related stocks.

Among the headlines, Microsoft just announced an US$80 billion investment in data centres for 2025 – an ongoing trend of big spending for Big Tech. Meanwhile, chip-manufacturing giant Foxconn reported record revenues in its fourth quarter, with December sales alone up 42% year-over-year.

The tech world recently turned its attention to Las Vegas, where Nvidia CEO Jensen Huang headlined the Consumer Electronics Show, the world’s biggest tech exhibition. Huang unveiled the firm's new chips and any breakthroughs in "physical AI" – robots that can interact with the real world.

If you're looking to invest in tech without putting all your eggs in one semiconducting basket, you might want to consider our Thematic Portfolios (which we’ve recently refreshed with new ETFs). Our Technology Enablers portfolio in particular gives you exposure across the AI value chain.

🎓 Simply Finance: Economic moat

Just as a moat protects a castle from attackers, an economic moat refers to a company's long-term competitive advantage. These barriers help defend a company's market position and profits against its competitors. For example, Coca-Cola's brand recognition makes it difficult for new drinks to compete, while patents protect a firm’s products and innovations from being copied.