‘I had the whole wrong idea’: Warren Buffett thought predicting the market was everything — until he read this book

Buffett claims he bought his first stock at age 11, then spent eight years focusing on stock price movements instead of studying the underlying companies.

“I had the whole wrong idea,” Buffett said in a 2022 interview with journalist Charlie Rose. “I thought the important thing was to predict what a stock would do and predict the stock market.” But when Buffett was 19 or 20 years old, he read a book that would change his perspective forever: “The Intelligent Investor” by Benjamin Graham.

Instead of charting stocks or "stock picking," Graham advocated for the valuation of underlying companies. He theorized that stock prices eventually follow a company’s financial performance. This simple philosophy shifted Buffett’s view on investing forever.

“I realized that I was doing it exactly the wrong way,” Buffett said. “I rejiggered my mind when I read the book.”

This philosophy has worked for Buffett, but not everyone has time to read 500 pages of financial analysis a day. Here are three ways to level up your investing depending on how much time you have.

Do your research

Buffett once famously said that he reads 500 pages a day (2). While this might not be what every investor needs to do, you should think about spending more time with news and analysis from reputable sources.

Buffett’s approach favors analysis based on understanding the companies you’re investing in, their industry, and the forces impacting their potential for growth. However, technical analysis — focusing on the numbers — also has a place for the modern investor.

When you learn to balance both data and investment philosophy, you’ll be well on your way to becoming a savvy market player. In short, where you get your stock market info from matters.

With Moby, you can get advice from expert former hedge fund analysts, with a 30-day money-back guarantee. In four years, across almost 400 stock picks, Moby's recommendations have beaten the S&P 500 by almost 12% on average.

Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

Trust the experts

Aside from doing your own research, it can pay to invest in professional advice.

Even Buffett surrounded himself with knowledgeable advisors at Berkshire Hathaway. Everyone has areas of expertise, but no one knows everything.

With this in mind, an expert advisor can help you raise your game. As Buffett once said, “Pick out associates whose behavior is better than yours and you’ll drift in that direction.”

“In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you.”

With Vanguard, you can connect with a personal advisor who can help assess how you’re doing so far and make sure you've got the right portfolio to meet your goals on time.

Vanguard’s hybrid advisory system combines advice from professional advisers and automated portfolio management to make sure your investments are working to achieve your financial goals.

All you have to do is fill out a brief questionnaire about your financial goals, and Vanguard’s advisers will help you set a tailored plan, and stick to it.

Once you’re set, you can sit back as Vanguard’s advisors manage your portfolio. Because they’re fiduciaries, they don’t earn commissions, so you can trust that the advice you’re getting is unbiased.

A ‘set it and forget it’ approach

While keen investors may be willing to spend the time to learn the markets, many investors can be better off with a passive approach.

"In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett once said.

"The trick is not to pick the right company. The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low-cost way (3).”