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'You Don't Need to be a Genius': Warren Buffett Explains How He Got Rich

He talks about how the book "The Intelligent Investor" changed his outlook and he "rejiggered" his mind.
Cover Image Source: Warren Buffett participates in a panel discussion | Getty Images | Photo by Chip Somodevilla
Cover Image Source: Warren Buffett participates in a panel discussion | Getty Images | Photo by Chip Somodevilla

Warren Buffett's nose for business is unparalleled. Wise words spoken by him have stood the test of time and proved to be useful for many first-time investors, so much so that people flock from different corners of the country to listen to him speak every year at the Berkshire Hathaway Annual Meeting. In an exclusive interview with the former CBS journalist, Charlie Rose, American businessman, investor, and philanthropist, Warren Buffett talked about how he started looking at stocks as businesses which changed his entire outlook.

The excerpt later went viral on the internet. In the interview, he says, "When I was 11, I picked stocks. I had the whole wrong idea, I was interested in watching stocks, and I thought stocks were things that went up and down." He continues, "I charted them, I read books on technical analysis, I read Edwards and McGee, I think that was the classic." He talks about how he read all the books over and over again and truly believed that the important thing was to predict where the stock market was going.

Then he talks about the book that changed his outlook. "Then I read Ben Graham, I was 19 or 20, and I realized, that I was doing it exactly the wrong way," adding that it did help that he had the background. He talks about how the book "The Intelligent Investor" changed his outlook and he "re-jiggered" his mind and made him realize that he was meant to buy a business that happened to be publicly traded, and not just stocks.

Getty Images | Photo by Alex Wong
Warren Buffett | Getty Images | Photo by Alex Wong

Buffett says that from that point, he no longer cared if the stocks went up the next day, the next month, or the next year. "I didn't have any idea what it would do, I didn't know what the stock market would do, but I knew businesses," he says. He further adds that you don't have to be a genius to achieve what he achieved. "I am a bright guy, who's interested in what he does, so I have spent a lifetime, doing it, I have surrounded myself with people who bring out the best in me, but you don't need to be a genius in what I do," he says.

"I am in a game, that you probably need 120 points of IQ, but a 170 doesn't do any better than 120, probably do worse, but you don't need brains. You need the right orientation," he continues.

He then explains how many people buy stocks. "They simply hope, it goes up next week," he says. "I think about what the company is going to be worth 10 or 20 years from now, and I hope it goes down, cause I will buy more."

"I try to keep my competitive spirit, in a game where I win. I do know this one, when I want to do something, I always want to do it big," he says.

Known as the Oracle of Omaha, Warren Buffett has amassed a personal fortune of more than $100 billion, as per Forbes. Buffett, who first bought a stock at the age of 11, and made his first real estate investment at the age of 14, studied under the legendary value investor Benjamin Graham, while also studying at Columbia University.

Buffett later teamed with Charlie Munger to buy the textile company Berkshire Hathaway which was on the verge of collapse at the time. He later used this company as a vehicle to acquire other businesses and make investments. Buffett is known for his value investing, he has time and again bought solid companies at low prices.