Buffett explains value investing: 'What gives you opportunities is other people doing dumb things'

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Buffett explains value investing: 'What gives you opportunities is other people doing dumb things'
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Value investing typically refers to buying underappreciated stocks or businesses and selling them at a higher value.

Buying when others were selling in fear has in part helped Berkshire return a whopping 3,787,464% from 1965 through the end of last year. That's way more than the S&P 500's 24,708% return in that time.

"In the 58 years we've been running Berkshire, I would say there's been a great increase in the number people doing dumb things, and they do big dumb things," he said. "The reason they do it is because, to some extent, they can get money from people so much easier than when we started." Charlie Munger, Berkshire Hathaway vice-chairman and Buffett's long-time right-hand man, has a more pessimistic view on value investing.

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