Buffett’s Long-Term Strategy Compared to the Market’s Quick Solutions: The Challenge of Imitation

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Buffett’s Long-Term Strategy Compared to the Market’s Quick Solutions: The Challenge of Imitation

Bitget-RWA2025/11/26 17:22

By:Bitget-RWA

- Berkshire Hathaway's $1.4B unrealized gain on Alphabet shares highlights its long-term value investing success, outperforming S&P 500 by 3x since 1965. - The portfolio's 23.4% allocation to "Magnificent Seven" tech giants reflects Buffett's strategic shift toward AI/cloud sectors despite his traditional aversion to tech volatility. - Buffett's five core rules - patience, concentration, and emotional discipline - remain difficult to replicate as most investors prioritize short-term gains over his "slow we

Berkshire Hathaway, led by Warren Buffett, has once again showcased the strength of its long-term value investing philosophy, recently posting an unrealized profit of $1.4 billion on its

Alphabet

(GOOGL) investment—a testament to the rewards of patience and steadfastness in the stock market

as highlighted by market observers

. The company’s holdings, with 23.4% allocated to three of the famed "Magnificent Seven" tech firms—Apple (AAPL),

Amazon

(AMZN), and Alphabet—reflect Buffett’s shifting strategy to tap into growth from artificial intelligence and cloud computing, areas he has traditionally avoided

according to industry experts

. As Buffett prepares to retire as CEO at the end of the year, his legacy prompts a key question: Despite his consistent outperformance of the S&P 500, why do so few investors follow his approach?

Over the past sixty years, Buffett has refined an investment approach centered on clarity and self-control. His five main tenets—discouraging most from active stock trading, focusing investments on businesses deeply understood, seeking companies with durable competitive advantages, buying when others panic, and keeping emotions in check—have helped Berkshire achieve an impressive 29.9% average annual return since 1965, far surpassing the S&P 500’s 10.1%

based on financial records

. Yet, few have managed to mirror his success. "No one wants to get rich slow," Buffett once remarked, capturing the difficulty of sticking to his method in a world obsessed with speed and automation. For example, in 2025, Berkshire

trimmed its Apple position after it reached a $170 billion high

, a decision that required the discipline to realize gains on a stock still viewed as a long-term core holding.

The recent move into Alphabet illustrates Buffett’s readiness to adapt. Although he has historically been cautious about tech stocks, Berkshire invested $4.3 billion in the company during Q3 2025,

seizing the opportunity presented by its AI advancements and perceived undervaluation

. Alphabet’s 70% surge this year has turned that investment into a $1.4 billion profit, reinforcing Buffett’s contrarian instincts. However, such gains come with the willingness to accept concentrated risk:

Apple

alone makes up 21% of Berkshire’s stock portfolio, while Amazon and Alphabet represent 0.8% and 1.6% respectively

according to portfolio breakdowns

. For most investors, this degree of focus is intimidating, especially when diversification is widely promoted as a way to guard against uncertainty rather than as a deliberate tactic

as noted by financial commentators

The upcoming leadership change to Greg Abel as CEO introduces further questions. Although Abel has been prepared for this role over many years, it remains to be seen if Berkshire’s culture can maintain Buffett’s distinctive mix of insight and discipline. "A great business requires more than a great CEO," Buffett wrote in a 1977 shareholder letter,

a perspective that now weighs on the company’s outlook

. Still, the very qualities that make Buffett’s strategy hard to imitate—patience, deep business knowledge, and emotional steadiness—are what have made it so effective over time.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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