Warren Buffett is one of the world's best investors. Before the U.S. Thanksgiving holiday, he wrote a letter to the people who own shares in his company. The letter had more life advice than investment tips. For example, he said not to feel bad about past mistakes. Buffett seems ready to step back from public attention.
Many people love Buffett. He gives honest advice that is hard to follow but always right. He lives by his own rules.
Buffett's main rule is simple: only invest in businesses you understand. We don't marry strangers or give money to people we don't know. But many people buy shares in companies they don't understand just because they hear good news or see quick profits.
Today, many big companies use hard-to-understand technology like semiconductors, AI, and quantum computers. These change very fast. It's tough to keep up. Some investors avoid looking more than three years ahead.
Luckily, we have new tools today. Ask ChatGPT or Google Gemini to explain hard topics simply, like 'What is high-bandwidth memory? Explain it for a child.' These AI helpers make it easier to learn about companies.
Understanding a business helps you hold your investments for a long time. Stocks go up and down. If you know the company well, you feel more sure during bad times.
Buffett has said this for over 70 years. He likes simple ideas, not fancy trends. If picking stocks feels too hard, try index funds like the S&P 500. This invests in the whole U.S. economy. It's safe and follows Buffett's advice: stay within what you understand.
Buffett teaches us to use common sense in investing. Understand your choices, hold steady, or pick simple options like index funds.