Warren Buffett's stock market investing mindset is one we can learn so much from. I use Buffett’s Coca Cola story to give a few examples on investing patience and knowledge.

Video length: 00:09:48

Transcript

Good day fellow investors. A few days ago we discussed compounding as one of the most powerful forces when it comes to investing. As Buffett would say just let the earnings, the interest, dividends compound and you will do extremely well today.

And what do you consider the most important quality for an investment manager. It's a temperamental quality not an intellectual quality. You don't need tons of IQ in this business.

I mean you have to have enough IQ to get from here to downtown Omaha. But what you do not have to be able to play three dimensional chess or be in the top leagues in terms of Bridge playing or something of the sort. You need a stable personality you need a temperament that neither derives great pleasure from being with the crowd or against the crowd because this is not a business where you take polls it's a business where you think. And Ben Graham would say that you're not right or wrong because a thousand people agree with you and you're not right or wrong because a thousand people disagree with you you're right because your facts and your reasoning are right.

Now let's talk about this character by discussing the story of Buffett and Coca-Cola. This story is very intriguing and interesting because the story of Buffett and Coca-Cola started when he was 7 years old. But why not let Buffett tell the story again.

Picture Omaha in 1937 I was 7 years old and no air conditioning so the summers were hot and humid. People went out on their lawns at night just to try and cool off and I got the idea that maybe I could sell them what you would call soft drinks and we called Pop. So I went round to a bunch of gas stations and in those days every gas station had a cooler with various soft drinks. And it had a little opener around the side and something to catch all the bottle caps. So I went around and collected all the bottle caps for weeks at these various gas stations. I collected eight thousand of them. And then I sorted them all out. And I saw thatCoca-Cola overwhelmed everybody else. So I decided to hook myself up to them. And. There were these little silver like ones that in those days and my grandfather at a grocery store so I went to my grandfather and I said, "how about giving me a deal on coke so I can sell around the neighborhood." And he saw me at the rate of six bottles for a quarter and I went around and sold it for a nickel each and I sold out every time. And I had no inventory I had no receivables. I had the best business I ever had. But I made one mistake and I didn't put the money I saved in the Coca-Cola stock.

But I rectified that mistake some years later.

So that some years later is exactly 50 years later. Buffett waited for 50 years to buy a company he always liked and why Buffett didn't buy earlier is a very important question. But the answer shows the discipline and the patience that Buffett had to watch something for 50 years and not touch it but then buy big. More about the story about Coca-Cola and everything else Buffett has been doing you can read in The Snowball, Warren Buffett's biography (almost autobiography biography). So I urge every investor to read this book.