How Buffett Built His Billion-Dollar Philosophy


There’s no question that Warren Buffett is one of, if not the greatest investor the world has ever seen. But how did he develop his unique investment philosophy? Who influenced his way of thinking about stocks and businesses?

In this email, you’ll learn about the 3 key investors who shaped Buffett’s philosophy and the invaluable lessons they taught him.

1. Benjamin Graham: The Father of Value Investing

Benjamin Graham earned his title because he revolutionized security analysis, creating a systematic way to evaluate the value of stocks. His books Security Analysis and The Intelligent Investor became the bibles of value investing.

Buffett first discovered Graham through The Intelligent Investor. A roommate even noted that Buffett acted as though he had “found God” after reading it.

Key Lessons from Graham:

  • Stocks Are Businesses: Stocks represent real companies with assets and profits. By analyzing these, you can determine their intrinsic value.
  • Margin of Safety: Always buy stocks for less than their intrinsic value to reduce risk. For example, if a stock’s value is between $80 and $120, Graham wouldn’t buy it unless it traded for $40 to $60.
  • Mr. Market: Markets are driven by emotions. Use periods of fear to buy undervalued stocks and periods of greed to sell overvalued ones.
  • Voting vs. Weighing Machine: In the short term, stock prices reflect emotions, but in the long term, they reflect the company’s fundamentals.

2. Philip Fisher: The Growth Pioneer

Philip Fisher focused on finding high-quality businesses with the potential for growth. While Buffett only met him once, Fisher’s book Common Stocks & Uncommon Profits left a lasting impression.

Key Lessons from Fisher:

  • Business Quality: Look for companies with growing sales, strong profit margins, and competent management.
  • Scuttlebutt Method: Gather insights by speaking with customers, employees, and competitors. This helps you evaluate a company’s future potential.
  • Concentrated Investing: Hold only a few carefully chosen stocks to maximize returns.

3. Charlie Munger: Buffett’s Right-Hand Man

Charlie Munger helped Buffett evolve from buying “cheap” companies to buying wonderful companies at fair prices.

Key Lessons from Munger:

  • Quality Over Cheapness: It’s better to buy a great company at a fair price than a mediocre one at a cheap price.
  • Compounding Wealth: Great businesses grow their intrinsic value over time, making them ideal long-term holdings.

Buffett’s Evolution

Buffett started as a Graham-style investor, buying undervalued stocks with little regard for their future potential. However, as his funds grew, so did his need for scalable opportunities. Influenced by Fisher and Munger, Buffett began prioritizing high-quality businesses with long-term growth prospects.

His famous mantra, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price,” reflects this evolution.

Final Thought:
By blending Graham’s value, Fisher’s growth, and Munger’s quality, Buffett developed his unique strategy—a combination that has made him one of the richest people in the world.


What’s your biggest takeaway from Buffett’s influences? Reply to this email or share your thoughts—I’d love to hear from you!

Value Theory

I dissect the stock holdings, investing techniques and stories from the world's greatest investors. Like, Buffett, Munger, Dalio, Marks, Klarman and more. Subscribe to my newsletter to receive actionable insights and improve your investing skills.

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