The Warren Buffett playbook | The story, secrets and lessons

This episode is dedicated to Warren Buffett.

In this episode, we take a closer look at The Warren Buffett Playbook. A tribute to the man behind the title of the world’s most respected investor of all-time. 

Starting with his modest roots in Omaha, we trace Buffett’s journey to becoming a global superstar. Nothing like we have ever seen before. We’ll unpack his investing principles, the strategies behind his decisions, and the timeless wisdom he’s shared with millions. From his approach to building wealth to the habits and philosophies that shaped his incredible success, this episode breaks it all down.

We hope you'll enjoy this episode as much as we did making it.

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Transcript

This episode is dedicated to our inspiration, our mentor, and one of the wisest, and most humble people in the world. Warren Buffett. We wanted to make this episode, as a way of saying thank you, but also to just reflect on everything he’s given you, me, and millions of others over the past 70+ years. 

Money and fame didn’t change him. We are incredibly grateful to experience Buffett in our lifetime. For that, we are eternally thankful.  

That’s why we’ve put extra time and effort into this episode, because Buffett deserves nothing less.  

Today, we’re exploring the life, wisdom, story, and legendary mindset and brain of a man who turned simplicity and passion into one of the biggest companies in the world.

Enjoy this episode. A tribute to Warren Buffett, the Oracle of Omaha.

Before we begin, let me briefly mention some of his achievements, because they deserve to be said first:

1. He surpassed the $100 billion dollar net-worth benchmark, different from many others, solely by investing.
2. Buffett has outperformed the S&P 500 for six decades. Yes, that’s 60 years. His company’s Berkshire Hathaway has compounded at an average of 13.7% annually, beating the SPY index by 3.7% each year. Doesn’t sound like much but a $1 in the SPY index would be worth $1701 dollars, while in Berkshire it would be worth $4827 dollars, 3 times as much.
3. Buffett helped stabilize the economy back in 2008, when he invested billions in Goldman Sachs and Bank of America, and General Electric. This helped these companies get through one of the most difficult times in history, while also becoming excellent investments for him.
4. Hundreds of books have been written on Buffett, making him the most influential and famous investors of all-time. Some of the best books ever written on him are: The SnowBall, The Warren Buffet way, The making of an american capitalist, the essays of warren buffett, the interpretation of financial statements, just to name a few.
5. According to some sources Buffett has alread donated over $57 billion dollars to several charities.
6. It’s estimated over 700.000 investors have been to the berkshire hathaway meeting in person since they started doing them live. 

At 94 years old, Buffett has amassed a fortune of over $150 billion even after giving away tens of billions.

Many think of billionaires as extravagant spenders. But Buffett defied this stereotype. Despite being one of the richest people in the world, he still lives in the same house he bought for $32,000 over 50 years ago, prefers McDonald's over gourmet meals, and loves Cherry Coke. His humility, wisdom, and unique approach to life and investing make him one of the most influential figures of our time.

Born in 1930 in Omaha, Nebraska, Buffett was fascinated by numbers at an age when most kids were obsessed with cartoons. He memorized population figures, tracked stock prices, and showed an entrepreneurial spirit early on.

At six, he bought packs of Coke from his grandfather’s grocery store and sold them for a profit. By eleven, he made his first stock purchase City Service Preferred shares with money earned from delivering newspapers.

Growing up during the Great Depression, he witnessed financial struggles firsthand. His father, a stockbroker, regularly discussed money at the dinner table. But young Warren wasn’t just listening he was learning.

Buffett’s journey to becoming the world’s greatest investor wasn’t linear. He started at the Wharton School at the University of Pennsylvania but wasn’t impressed, so he transferred to Columbia Business School, where he met the legendary Benjamin Graham his mentor and the father of value investing.

Graham’s philosophy was simple: find stocks trading for less than their intrinsic worth, essentially, buying a dollar for fifty cents. Buffett absorbed every lesson, mastering financial statements and spotting undervalued companies. This principle became the foundation of his early investment strategy.

After graduating, Buffett was determined to work for Graham’s firm, Graham-Newman Corporation. But Graham initially turned him down. Undeterred, Buffett offered to work for free, and eventually, Graham gave him a job. There, Buffett mastered the fine details of investing.

By 1956, Graham retired, and Buffett returned to Omaha with $174,000 around $1.9 million in today’s money ready to start his own investment firm.

Enter Berkshire Hathaway. The next phase of his life

Before we discuss Berkshire, we must mention perhaps the most important figure in Buffett’s life: Charlie Munger.  Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation," Buffett said after Munger died at the age of 99. 

"Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom, and participation," Buffett said after Munger passed away at 99.

The two met through mutual acquaintances and shared an immediate connection. Buffett recalled, "After a few minutes in the restaurant, I knew that this guy's going to be in my life forever."

Warren Buffett and Charlie Munger worked together for 45 years, and although this episode is about Buffett, I couldn’t leave Munger out. Back to Buffett and Berkshire. Charlie Munger learned Buffett that cigar-butt investing wasn’t the best way, and a low valuation isn’t all that matters. This changed Buffetts investing career and mindset forever. Instead of looking for cheap businesses, he started looking for excellent business for a fair valuation. If he didn’t meet Munger, who knows what would’ve happened.

The story is well documented in some of its books, and the annual letters to shareholders dating all the way back to 1965. I’ve spent the last few years reading all the letters, bottum-up, from 1965 to 2024. So here’s the story.

Berkshire-Hathaway started a textile company, then an insurance company, before it became an investment company. In 1962, Warren Buffett began buying stock in Berkshire Hathaway after noticing a pattern in the price direction of its stock whenever the company closed a mill. Eventually, Buffett acknowledged that the textile business was failing and the company's financial situation was not going to improve. In 1964, Stanton, an American businessman who managed Berkshire Hathaway, made an offer of $11.50 per share for the company to buy back Buffett's shares. And so, Buffett agreed to the deal, knowing damn well, the business is losing all momentum and financially isn’t looking to great. 

A few weeks later, Warren Buffett received the offer in writing, but what Buffett noticed was that the offer changed to $11 dollars and 38 cents, instead of the promised $11 dollars and 50 cents. It comes down to a few pennies, but this bothered the crap out of Buffett.  He later admitted that this lower, undercutting offer made him angry. So, instead of selling at the slightly lower price, Buffett decided to buy more of the stock to take control of the textile company and fire Stanton. But this put Buffett in a very difficult situation where he was now the majority owner of a textile business that was failing. He later admitted that this was his worst purchase ever.

And despite his effort to save the textile operations, the industry just wasn’t favorable. And eventually, would be the downfall of the company. By 1967, Buffett saw the writing on the wall. The textile business was failing, and no amount of investment could save it. Buffett makes it clear in his letter to shareholder that his workers weren’t the problem. The real issue was global competition. Other countries were paying their workers a fraction of U.S. wages, making it impossible to compete. No matter how much they invested in technology or efficiency, costs kept rising while profits shrank. And every time they spent money trying to improve, so did their competitors! It was like a never-ending arms race where everyone kept spending, but no one actually got ahead. Buffett compares it to watching a parade if one person stands up on tiptoes to see better, soon everyone is standing, and no one has a better view!

He quoted the famous Woody Allen is his letter, saying ‘more than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray we have the wisdom to choose correctly. Meaning? Either he kept pouring money into textiles and got terrible returns, or he stopped investing and let the business slowly die. Not exactly a fun choice!"

By 1985, Buffett finally admitted defeat. The business was burning cash, and no one wanted to buy it. If he could have sold it, he would have even at a lower price. But the reality was, no one was interested in an industry that was clearly doomed. So, he made a tough decision he stopped putting money into textiles and started using Berkshire’s cash flow to invest in stronger industries, especially insurance. This move completely changed the company’s future.

He believed that the insurance industry was different from other businesses. He felt the insurance businesses could take advantage of the timing of cash paid out and taken in. For example, insurance policies include consumers paying in money, and the insurance company holds the money until paying out a claim. But they can invest those funds between taking in the money and paying it out. Also known as Buffett’s famous insurance “float.

Let’s review some of the most important businesses he bought and important investments he made, and draw some lessons them.

1. In 1972, Buffett and his partner Charlie Munger had the chance to buy See’s Candies, a well-loved West Coast chocolate brand. Buffett paid $25 million for See’s Candies in 1972. At first, it seemed like a simple candy business, but it was actually a cash flow machine! See’s had loyal customers, strong brand recognition, and pricing power meaning they could raise prices without losing customers. Over time, it generated over $2 billion in profits, making it one of Buffett’s sweetest deals. 

At the time, Buffett was still heavily influenced by his mentor Benjamin Graham, who taught him to buy stocks at dirt-cheap prices (deep value investing). But See’s Candies wasn’t a “cheap” company. Buffett finally agreed to pay up. Buffett hesitated. He wanted to pay only $25 million, not the $30 million price tag. He almost walked away. They bought See’s Candies for $25 million upfront, plus $5 million later. Over time, the investment turned into a cash machine, generating over $2 billion in profits. Buffett later admitted that not buying See’s Candies would have been a huge mistake and that it changed the way he invested forever. Instead of just looking for cheap stocks, he started buying great businesses at fair prices

The lesson here: 👉 “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Buffett invested in The Washington Post for $10 million in 1973. Newspapers had a monopoly back then, meaning steady cash flow and pricing control. Over time, that investment grew to over $1 billion before Buffett sold it. He backed strong management and saw long-term value in media. He picked this up during a market downturn, when every ran away.

The lesson it took from this story was: 👉 “Monopolies don’t last forever, and can be disrupted.

Buffett first invested in GEICO in 1976 after learning about it from his mentor, Benjamin Graham. Why? It had a brilliant low-cost model selling insurance directly to customers instead of using agents. That meant lower costs and higher profits. In 1996, Buffett bought the whole company, and today, GEICO is a key part of Berkshire Hathaway.

A lesson from GEICO:👉 Find businesses with a durable competitive advantage because GEICO’s cost structure, their main moat, made it a huge winner!

In 1988, Buffett  bought $1 billion dollars worth of The Coca-Cola Company. It wasn’t cheap, (he learned from See’s Candies mistake) and it had a huge moat (which he learned from Munger and GEICO) Coke wasn’t just a drink it was a brand that billions of people loved. This investment now pays over $700 million a year in dividends alone!

The lesson here? 👉 Strong brands can last for a very long time. Coke has been a global icon for decades.

Buffett bought Burlington Northern Santa Fe Railway in 2009 for $26 billion, calling it an 'all-in bet on America.' Railroads might seem boring and old-school, but they’re essential for transporting goods, and BNSF had a near-monopoly on the most important routes, back then, but still do today. They’re a key part of the United States infrastructure, and getting to build your own railroad company now, will be nearly impossible.

👉 The lesson is to look for businesses that provide critical services that never go out of style! Look for must-haves, instead of nice-to-haves.

Last but not least, Apple. Buffett avoided tech stocks for decades.Feeling it would fit within his circle of competence. But Apple wasn’t just a tech company, it’s mostly a consumer brand with exceptional customer loyalty and pricing power. The founder and management has led Apple to be an amazing, one-of-a-kind company.

👉 The lesson from Apple’s investment can be, be open to expand your circle of competence, be eager to learn and embrace change, instead of avoid it. Because if Buffett didn’t buy Apple, who knows what would’ve happened. Perhaps Bershire wouldn’t be as large and successful as they are today.

Segment 4: The 2008 Financial Crisis – The One-Man Army

Fast-forward to 2008 the financial crisis. Wall Street was in chaos, banks were collapsing, and investors were panicking. But one man remained calm Warren Buffett.

With his usual long-term vision, Buffett stepped in, investing billions into companies like Goldman Sachs and Bank of America. Why? Because when others were running scared, he saw opportunity.

As he famously said: Be fearful when others are greedy, and be greedy when others are fearful.

Nowadays, every investor says this, and it's something you hear constantly, but only a handful can actually live up to it during challenging times.

Let’s fast-forward to today and talk about the Buffet lifestyle.

"Let’s fast-forward to today and talk about Warren Buffett’s lifestyle. You’d think that someone worth over $100 billion would live like a king private jets, mansions, yachts. But Buffett? Not even close."

"Instead of a fleet of luxury cars, he drives a modest Cadillac. Instead of five-star meals, he eats McDonald’s almost every day. And here’s the funny part his breakfast depends on the stock market. If the market is up, he treats himself to a bacon, egg, and cheese biscuit. If it’s down, he goes for a cheaper meal.

"And let’s talk about his diet Buffett eats like a kid at a birthday party. French fries, hash browns, Coca-Cola, and ice cream. His daughter Susie once joked that he’s probably never even had a glass of water in his life!"

But the important thing is that Buffett doesn't measure success by how much money he has. He credits his happiness to doing what he loves every single day. To him, wealth isn’t about fancy things it’s about waking up excited to work, invest, and play bridge with his friends. Almost all of his wealth, around 99%, will be donated to charity after his death. I mean, talk about having a heart of gold. Buffett said, and I quote “Giving money to make the world better is far more valuable than hoarding it.”

You don’t need luxury to be happy. You need purpose, passion, and doing what you love. And maybe... a little bit of McDonald’s along the way. Beautiful. I think we can all learn a thing or two from him.

I can keep talking about Buffett for hours, and perhaps, I will in another episode, but this is not the one.

What can we learn from him? We’ve spend quite some time on this specific question, because the man is a walking poët, so we had to make a decision and decided to only extract a few most valuable lessons for us specifically. 

Let’s start with lesson number 1. Think for yourself

Never ask a barber if you need a haircut.

This one is related to the need to think for yourself. Getting advice from brokers and financial advisors is ok up to a certain point, but if it gets to the point where you buy into someone else’s thinking and reasoning, then you have lost it.

His best friend and lifetime partner Charlie Munger said something similar, and I quote:

“…It’s incentive-caused bias: His professional reputation is all tied up with what he knows. He likes himself and he likes his own ideas, and he’s expressed them to other people… Once you realize that you can’t really buy your thinking partly you can, but largely you can’t…you have learned a lesson that’s very useful in life.

This is why incentives are so important and why we always look for them.

Lesson number 2.Integrity and Humility

“In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you."

Warren Buffett has built his empire on two things that money can’t buy integrity and humility. He places immense value on integrity and humility, both in his personal life and professional dealings. He believes that without integrity, intelligence and energy can become detrimental. "For Buffett, trust is everything. Whether it’s choosing business partners or making investments, he only surrounds himself with honest, ethical, and reliable people. No amount of talent can make up for a lack of character."

Success without integrity is meaningless. Surround yourself with people you trust, stay humble no matter how successful you become, and never let greed or ego get in the way of doing what’s right.

Lesson number 3. Remember ABC

You need to fight off the ABCs of business decay, arrogance, bureaucracy, and complacency. When these corporate cancers metastasize, even the strongest of companies falter.

Success can be a company's greatest downfall if it breeds arrogance, bureaucracy, and complacency

Whether it's growing an investment or building a career, patience is a key ingredient to success. Arrogance blinds leaders to their weaknesses, bureaucracy slows decisions with red tape, and complacency makes companies lazy. The best businesses stay humble, efficient, and always hungry to improve, never letting success make them comfortable.

Lesson number 4. Patience

"No matter how great the talent or efforts, some things just take time." 

In a world that loves instant results, Buffett reminds us that good things often require waiting. 

Lesson number 5. Know yourself.

"You don’t have to be an expert on every company... You only have to be able to evaluate companies within your circle of competence." 

Buffett suggests focusing on what you know well. By understanding your own strengths and limits, you can make better decisions and avoid unnecessary risks.

Okay, 1 more. Lessons 6: No strikes against you. This one really hit home, especially what we’re trying to do with The Dutch Investors.

The stock market is a no-called-strike game. You don’t have to swing at everything–you can wait for your pitch. The problem when you are a money manager is that your fans keep yelling, ‘Swing, you bum!’

It’s fun to watch baseball players swing. Whether they connect and hit a home run or swing and strike out brings out different responses, but you can let as many balls go by without having any strikes against your name.

We see this a lot in the financial world. Like most investor like following people that are always buying or selling. There is no need to invest in every stock idea that comes up. When the market goes up and everyone is hitting a homerun, it’s tempting to swing along with them, even at the pitches that are in the glove. Most people confuse skills with luck and a bull market. Everybody looks like a genius when the entire market is going up, just look around on your favorite socials.

Investing is a waiting game. Take all the time in the world.

And when the right pitch comes along, swing with all your might.

I mean, there are so many more. Perhaps another episode is needed to just talk about all his timeless advice and quotes.

To us Warren Buffett isn’t just a legend. He is something we look up to, we inspire to adopt his believes and advice and hopefully we can do just a fraction of what he has done for millions of others. At 93, he’s still sharp, still investing, and still offering wisdom to anyone willing to listen.

Will there ever be another Warren Buffett? Maybe, but probably not. But we can all take a page from his book whether it’s making valuing integrity, friendship, keeping things simple or simply enjoying a Cherry Coke with a smile.

That’s all for today’s. If you enjoyed this episode, please let us know by dropping a 5-star review, since this is the best way to support us on here.

Until next time stay curious, keep learning and happy investing.