Buffett has a simple test for every stock he buys: Would he be happy owning it if the market were to close for 10 years? If the answer is no, he doesn’t buy it.
This philosophy explains why he built a $344 billion cash stockpile while other investors have chased perhaps overvalued stocks as the stock market has risen in 2025. It’s also what has helped his company generate over 20% annual returns for four decades, yet many investors still overlook it.
Buffett’s Core Belief: The 10-Year Test
Buffett’s investment philosophy centers on a single powerful idea: If you wouldn’t be happy owning a stock with the market closed, you shouldn’t own it with the market open.
The day Berkshire Hathaway Inc. (BRK.A, BRK.B) was listed on the New York Stock Exchange in 1988, Buffett told specialist Jimmy Maguire that he’d consider him an enormous success if the next trade in Berkshire…
