Bill Gates once tried to convince Warren Buffett to buy a PC — Buffett told him to ‘stick to computers’ and he’ll stick to gum. What you can learn from that exchange to get rich in 2025

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Bill Gates once tried to convince Warren Buffett to buy a PC — Buffett told him to ‘stick to computers’ and he’ll stick to gum. What you can learn from that exchange to get rich in 2025

Many investors are eager to uncover the secret behind Warren Buffett’s remarkable success in identifying winning companies.

Between 1964 and 2023, his company, Berkshire Hathaway, achieved an astonishing

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of 4,384,748%.

Accredited investors can become the landlord of Walmart, Whole Foods or Kroger — and benefit from regular distributions without lifting a finger.

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Car insurance premiums in America are through the roof — and only getting worse. But less than 2 minutes can

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These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes.

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In a previous

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at Georgetown University, an audience member cut to the chase, asking, “What would you think is the most important thing — the key — in evaluating a company?”

Without missing a beat, Buffett responded, “The most important thing is to be able to define which ones you can come to an intelligent decision on and which ones are beyond your capacity to evaluate.”

Buffett emphasized that you don’t need to understand — or be right about — thousands of companies to succeed. Instead, as he put it, you only need to be right about “a couple.”

To illustrate his approach to the Georgetown audience, Buffett shared a memorable exchange with

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co-founder Bill Gates.

On July 5, 1991, Buffett and Gates were in Seattle when Gates, eager to share his enthusiasm for the burgeoning world of computers, turned to Buffett and said, “You’ve got to have a computer.”

“Why?” Buffett asked.

Gates replied with a practical suggestion, “Well, you can do your income tax on it.”

But Buffett, whose approach to wealth focused on reinvesting rather than receiving income, responded matter-of-factly, “I don’t have any income. Berkshire doesn’t pay a dividend.”

Gates pressed on, suggesting that a computer could help Buffett keep track of his stock portfolio. But Buffett, whose investment portfolio consisted solely of Berkshire Hathaway, simply responded, “I only have one stock.”

Undeterred, Gates insisted, “It’s going to change everything.”

This prompted Buffett to dig deeper. “Will it change whether people chew gum?” he asked.

“Probably not,” Gates admitted.

“Will it change what kind of gum they chew?” Buffett followed up, prompting Gates to again reply, “Nah.”

With that, Buffett summed up his thoughts: “Well, then I’ll stick to chewing gum and you stick to computers.”

Buffett used this story to highlight his investment philosophy. His success didn’t stem from understanding every emerging technology or industry trend; rather, it came from staying within his “circle of competence.”

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In his view, you don’t need to know everything about every industry to succeed as an investor — you just need to thoroughly understand a few things.

Read more: Rich, young Americans are ditching the stormy stock market —

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Chewing gum firmly falls within Buffett’s “circle of competence.” In his 1993 letter to shareholders, Buffett identified Wrigley as “dominant” in the chewing gum market.

When food giant Mars sought to acquire Wrigley in 2008, Buffett

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$6.5 billion — buying $2.1 billion of Wrigley preferred stock and $4.4 billion of its bonds — to help fund the deal.

The bet paid off handsomely: between interest payments, dividends, and gains on the bonds and shares, Buffett reportedly made an estimated $6.5 billion from his Wrigley investment.

To illustrate his approach, Buffett used a baseball analogy, emphasizing patience. “The most important thing in hitting is waiting for the right pitch,” he said, quoting baseball legend Ted Williams.

Unlike baseball players, who must eventually swing, Buffett argued that investors face “no called strikes.” They can pass on any opportunities that don’t feel right, waiting as long as necessary for the perfect pitch.

“People can throw

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at me and, you know, you name it, any stock, General Motors, and I don’t have to swing. And nobody’s going to call me out on called strikes,” Buffett explained.

He added that investors face a strike only if they take a swing and miss, making it a “terrible mistake” to feel compelled to have an opinion on every company or industry.

Beyond chewing gum, Buffett has long been a fan of another staple: soda. Coca-Cola, a brand that’s been around since 1886, captured Buffett’s attention because of its vast market presence.

“Coca-Cola’s been around since 1886. There’s 1.8 billion 8-ounce servings of Coca-Cola products sold everyday now. If you get one penny extra — that’s $18 million a day, and $18 million times 365 is $6.57 billion annually… from one penny. Do you think Coca-Cola is worth a penny more than, you know, Joe’s Cola? I think so,” he explained to the Georgetown University audience.

As we approach 2025, with the world growing more complex — marked by political uncertainty, economic pressures, global tensions and a rapidly evolving tech landscape — Buffett’s straightforward investment philosophy stands firm and relevant.

His approach reminds us that we don’t need to chase the latest trends to find success. Instead, Buffett advocates focusing on one’s circle of competence, sticking to businesses that are easy to understand and have enduring demand.

Rather than constantly predicting “the next big thing,” Buffett finds long-term value in companies with proven, lasting appeal.

True to his investment philosophy, Buffett’s conviction in Coca-Cola has stood the test of time. Berkshire first invested in Coca-Cola in 1988, and today, it

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400 million shares of Coca-Cola, a stake now valued at $26 billion.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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