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Warren Buffett shares the epiphany he had in 1942 that dictated the rest of his investment career

Joe Ciolli   

Warren Buffett shares the epiphany he had in 1942 that dictated the rest of his investment career
Stock Market2 min read

  • Warren Buffett shared an investment story from 1942, when he was 11 years old, that's helped inform all of the decisions he's made during his legendary career.
  • Follow Business Insider's coverage of Berkshire Hathaway's annual meeting here.

Warren Buffett has a story for you.

It took place back in March 1942, when the Berkshire Hathaway chief executive officer was 11 years old - and it shines a light into the psyche of one of history's most successful investors.

Speaking in Omaha, Nebraska at his firm's annual shareholder meeting, Buffett explained that - even at such a young age - he was looking to make a stock trade during the throes of World War II.

On March 11, he settled on the purchase of three shares of a company called Cities Service Preferred, an oil and natural gas producer, and placed the trade through his father.

It wound up being what Buffett describes as a "momentous" day for his investment career, as the Dow Jones industrial average saw a large decline, spooked by escalating geopolitical headwinds. While Buffett didn't sell out of his position at this point, he was scared.

By the time July rolled around, Buffett's patience ran out, and he dumped his position at $5.25 a share for a meager gain.

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Berkshire Hathaway Annual Meeting / Yahoo Finance

What's the significance of this story? It's that Buffett is preaching patience to investors who might be feeling antsy about the global risk environment.

He laments not holding onto Cities Service for a longer period, and that regret has informed the long-term buy-and-hold strategy that's served him so well throughout his legendary career.

So the next time President Donald Trump has you on edge, just remember Buffett's advice: Many of these headwinds are transitory, so keep investing with confidence.

Follow along with all of Business Insider's coverage of the Berkshire Hathaway meeting here.

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