This 1 Quality Is What Makes Warren Buffett So Successful. Do You Have It Too?

What makes Warren Buffett such an incredibly successful investor? He’s a genius at researching a stock and evaluating its potential and risk. He’s a master at negotiating deals that greatly benefit his company Berkshire Hathaway and its investors. But one other quality has helped keep Buffett on top over his 84-year career as an investor. He’s remarkably consistent.

Buffett often shares pithy of advice about both investing and life. And there’s one of those bits of advice that seems especially pertinent right now. “Be fearful when others are greedy and greedy when others are fearful.”

The statement itself is a perfect example of Buffett’s consistency. He first alluded to it in a letter to shareholders 39 years ago. In the letter, he explained that Wall Street will predictably be gripped by bouts of greed (rampant buying) and fear (rapid selloffs). But while you can be certain these events will occur, it’s impossible to know when they will happen or how long they will last. With that in mind, he wrote, Berkshire would not try to time the market. Instead, it would try to to run counter to the prevailing trend. That means buying when everyone is selling and selling, or at least not buying, during major stock market rallies such as we’re seeing right now.

Buffett follows his own 39-year-old advice.

Almost 40 years after he first laid out this strategy, Berkshire Hathaway is still following it. The Dow Jones Industrial Average is at a record high at this writing, but Buffett has been mostly staying out of it for past year or so. Instead, Berkshire is holding about $344 billion in cash or Treasury bonds. That’s very roughly a third of the company’s total assets. Historically, Berkshire has held about 13 percent of its assets in cash, so it looks like Buffett is more fearful than usual these days.

By partially sitting out this rally, he also left money on the table. In particular, he sold a large portion of the company’s Apple shares. With that move Berkshire Hathaway forfeited about $50 billion in gains when Apple stock reached a record high this week. That’s missing out on a lot of greed.

But there’s Buffett’s consistency for you. This approach of moving in the opposite direction from the markets has served Berkshire well for 60 years, and he’s not likely to change it. In fact, consistency was the subtext of his most famous bet. Buffett bet a hedge fund manager $1 million for charity that any hedge fund would bring in lower returns than an S&P index fund over a ten-year period. After all, there’s nothing more consistent than an index fund. It holds the exact same shares year after year, only changing if the index itself adds or removes a stock. And the index fund handily beat out all five hedge funds that the hedge fund manager used for the bet.

Greg Abel may do the same.

Buffett has found a simple approach to investing that he’s used consistently for many decades. Though he’s stepping down as Berkshire CEO at the end of this year, his successor Greg Abel may well follow a similar approach. After all, Abel has been working at Berkshire for more than 25 years. It sounds like he knows a thing or two about consistency himself.

In our rapidly changing world, we tend to focus on agility. We pivot quickly to meet changing circumstances. We speed our adoption of new technologies, most notably AI, because we fear getting left behind. So it’s great to have Buffett provide a reminder that frequently changing your approach isn’t the only path, or even the best one. Finding a principle that works for you and then sticking with it might be a better, more dependable way to reach success. Especially if, like Buffett, you hope to measure your success in decades rather than quarters or years.