Warren Buffett, the long-time chairman and CEO of Berkshire Hathaway (BRK.A) (BRK.B), has often framed his investment wisdom in terms that are both practical and memorable. One of his most enduring lessons centers on the value of avoiding unnecessarily difficult challenges in favor of straightforward opportunities. As he put it, “After 25 years of buying and supervising a great variety of businesses, Charlie [Munger] and I have not learned how to solve difficult business problems. What we have learned is to avoid them.”
The quip reflects Buffett’s approach to both business and investing: focus on the attainable, the simple, and the obvious rather than chasing overly complex or risky endeavors. Buffett has long emphasized that success does not come from brilliance in solving intricate problems but from the discipline to avoid them altogether. His perspective carries weight not only because of his track record but also because of his consistency in applying this principle across decades.
The context of this observation lies in the experience of Buffett and his late, longtime business partner Charlie Munger during their time managing Berkshire Hathaway. Rather than pursuing turnaround stories or attempting to rescue failing enterprises, they largely concentrated on acquiring businesses with clear, durable advantages. Companies like See’s Candies, Coca-Cola (KO), and GEICO exemplify this philosophy: straightforward businesses with strong brands and loyal customer bases that require no heroic effort to maintain profitability.
Buffett’s remark does acknowledge exceptions. He noted that on rare occasions, tackling a tough problem could yield significant rewards. Berkshire’s involvement with American Express (AXP) and GEICO, both of which faced temporary but solvable crises, are examples where identifying the nature of the problem — and recognizing it as fixable — led to substantial long-term gains. Still, such instances were carefully chosen, aligning with Buffett’s overarching philosophy of avoiding “dragons” rather than attempting to slay them.
The principle resonates broadly in business and markets. Many firms attempt to solve complex, entrenched problems — whether in struggling industries, highly competitive sectors, or heavily indebted companies — only to expend resources without lasting results. By contrast, focusing on clear advantages, stable economics, and straightforward growth opportunities often proves more rewarding. Buffett’s quote emphasizes the discipline of selecting investments and business ventures where success is more likely and more predictable.
Today, as businesses confront challenges ranging from rapid technological change to geopolitical uncertainty, Buffett’s approach offers a reminder about risk management. In volatile markets, investors may be tempted to pursue complicated strategies or speculative bets. Yet history shows that sticking with simple, understandable opportunities tends to be more sustainable over time.
The authority of Buffett’s insight lies in the extraordinary track record of Berkshire Hathaway, which transformed from a failing textile business into one of the world’s most valuable conglomerates. That transformation did not come from tackling impossible problems but from consistently identifying solvable ones. His message is clear: in business and investing alike, the path to success is less about clearing towering obstacles and more about the discipline to recognize and seize opportunities that are already within reach.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com