Warren Buffett shares key investment lessons at Berkshire Hathaway annual meeting. Tap to read

Chairman and chief executive of Berkshire Hathaway, Warren Buffett said that his company's first-quarter profit soared to $35.5 billion, which reflected gains from common stocks like Apple Inc, and booster operating profit.

While addressing the annual shareholder meeting, the billionaire investor, along with vice chairman Charlie Munger and Greg Abel, and Ajit Jain, took questions from those who participated in the meeting in a five-hour long session. Know about the key investment lessons shared by them during the annual shareholders meeting.

Index funds are great investment tools

During the annual general meeting, Warren Buffett didn't hesitate in repeating his age-old advice, “Index funds are a great investment tool because the costs are low.” His fascination for index funds can be measured by the fact that he instructed his trustees to invest 90% of his estate into an S&P 500 index fund for the benefit of his wife after his demise. He always encourages people to invest in S&P low-cost index funds.

Avoid stupid mistakes

Warren Buffett also advised his shareholders to avoid stupid mistakes. Once he said, “While it's good to learn from your mistakes, it's better to learn from other people's mistakes.”

During the meeting, he also advised people to not make mistakes that will take them out of the game. He also said that people should spend a little bit less than they earn to stay out of the spiral of debt.

Stay as rational as possible

Stressing again on his previous investment mantra, Warren Buffett said that it is important to stay as rational as possible. “We may make bad investment decisions plenty of times. The key is to try to stay as rational as possible,” he said.

Warren Buffett on commercial real estate market

While answering a question on the future of the commercial real estate market, Warren Buffett said “Buildings generally don't go away, but most people like to buy with non-recourse in real estate.” He explained that the value of real estate market mainly depends on how much one can borrow non-recourse, and it's starting to see the consequences of that. 

Warren buffet on value investing

Warren Buffet said that opportunity in value investing comes when others are busy in doing ‘dumb things’. Contradicting his views, Charlie Munger said, value investors should be comfortable making less because of high competition.

Old-fashioned intelligence works well

Vice Chairman of Berkshire Hathaway, Charlie Munger, stressed the importance of old-fashioned intelligence during recent times. He also insisted USA to do a lot of free trade with China. While answering about his company's functioning, he said that the company mainly works on allocating capital. “We want companies with good management in place to run daily operations,” he added.

Just hold the stock

Sharing his company's strategy, Charlie Munger said that Berkshire Hathaway only follows a simple estate planning to “hold the goddamn stock”. He also added that the best opportunities arise when other people are doing dumb things. Other than this, he also hinted that value investing will become harder because of rising competition in the market.