Everyone wants to be the next Warren Buffett. Very few people actually invest the way he did. Most of us buy what is trending on Telegram groups, sell the moment a stock drops 10%, and switch strategy every few months. Buffett did almost the opposite for six decades, and the results speak loudly.
Consider this. Between 1965, when Buffett took charge of Berkshire Hathaway, and the end of 2024, Berkshire's shares gained about 5,502,284%. That is roughly 19.9% a year. The S&P 500, including dividends, returned about 10.4% a year over the same stretch. Put in money terms, $1,000 in the US index in 1965 would have grown to around $390,000. The same $1,000 in Berkshire would have become about $55 million.
Buffett handed the chief executive job to Greg Abel at the start of 2026, but his way of thinking has not gone anywhere. Here is what it looks like, translated for a Nepali investor.
1. Plan to hold for years, not days
Buffett once said his favourite holding period is forever. He meant it. He buys a business expecting to own it through good years and bad, letting profits pile up and compound.
In Nepal, the habit is often the reverse. People apply for an IPO, sell on the first day it hits the upper circuit, and move on. That can make a few thousand rupees. It rarely builds wealth. If a bank, insurer or hydropower company keeps growing its earnings, holding it for ten years usually beats jumping in and out.
2. Stay inside what you understand
Buffett calls it his circle of competence. He avoided businesses he could not explain in simple words, even when everyone else was getting rich from them.
You can do the same. If you work in banking, you probably understand loan quality and interest margins better than most investors. If you are an engineer, you may judge a hydropower project's site and construction risk better than a stock analyst. Start there. If you cannot explain in two sentences how a company makes money, you should not own it.
3. Buy good businesses at fair prices
Buffett is best known for value investing: buying a company for less than it is really worth. Over time, he refined that into buying wonderful companies at fair prices, rather than average companies at bargain prices.
What does "wonderful" look like? Low debt, steady earnings growth, high return on equity, and something that protects it from competitors. Buffett calls that protection a moat. In Nepal, a moat could be a strong brand, a cheap and stable source of deposits, or a hydropower project with good water flow and a solid power purchase agreement. Then check the price. A great company bought at 60 times earnings can still be a poor investment.
4. Be brave when others panic
"Be fearful when others are greedy and greedy when others are fearful." It is Buffett's most quoted line, and the hardest to follow.
When NEPSE crashes and everyone on social media says the market is finished, that is often when quality shares go on sale. When your neighbour who has never read a balance sheet is suddenly giving you stock tips, that is usually a time to be careful. Doing this needs cash on hand and a calm head, which is why it is so rare.
5. Don't spread yourself too thin
Most advisers tell you to diversify. Buffett has a sharper view. He once said diversification is protection against ignorance, and makes little sense if you know what you are doing. He put large amounts into a small number of businesses he understood deeply.
A word of warning here. Buffett can concentrate because he does enormous research. If you are a beginner, owning 30 random stocks is not the answer, but neither is putting everything in one company. A focused portfolio of eight to twelve businesses you have actually studied is a sensible middle path. If you do not have time to study, a mutual fund does the spreading for you.
6. Never stop reading
Buffett reportedly spends most of his day reading: annual reports, newspapers, industry papers. He treats learning as part of the job.
The local version is easy. Read the quarterly reports companies publish. Look at their annual general meeting documents. Follow NRB's monetary policy and the national budget, since both move Nepali banks and the wider market. One hour a week of real reading puts you ahead of most people who trade on rumours.
The bottom line
None of Buffett's rules are secret, and none need a finance degree. Think long term. Buy what you understand. Pay a fair price for quality. Stay calm when others panic. Keep learning. The hard part is sticking to them when the market is screaming at you to do something else.
As Buffett likes to put it, the stock market is a device for transferring money from the impatient to the patient. Make sure you are on the receiving end.
