Warren Buffett Says Don’t Invest in Berkshire Hathaway Unless You ‘Understand Our Operations, Attitudes and Expectations’

In his 1983 Berkshire Hathaway (BRK.B) (BRK.A) shareholder letter, Warren Buffett summed up one of his least-discussed but most consequential philosophies in business leadership: “We try to attract investors who will understand our operations, attitudes and expectations… and dissuade those who won’t.” It’s an unorthodox stance in a market culture where companies often obsess over appealing to as many investors as possible. But for Buffett, building a shareholder base isn’t about quantity; it’s about quality.

Buffett’s reasoning is straightforward: the shareholders you attract influence the stability, decision-making, and valuation of your business. Investors who understand a company’s long-term approach are less likely to panic during downturns, demand short-term results, or pressure management into unsound moves. By contrast, courting investors with a trading mentality — those who are focused on short-term price swings rather than intrinsic business value — can create volatility that serves neither management nor long-term owners.

His approach is deliberate. Berkshire’s shareholder letters, policy decisions, and even its refusal to split the stock are “advertisements” to attract the right type of investor while subtly repelling the wrong kind. This self-selection strategy works like a filter: clear communication draws disciplined investors, avoiding hype turns away short-term speculators, and an owner-oriented mindset appeals to those thinking in decades, not days. As Buffett has explained elsewhere, the goal is to create a market “populated by rational, informed investors” — not speculators chasing headlines.

In today’s markets, this principle is more relevant than ever. Meme stocks can double overnight, social media posts can move billions in market cap in hours, and zero-commission trading apps have gamified speculation. For public company CEOs, a shareholder base dominated by short-term traders can pressure management into unsustainable earnings “beats,” drive up volatility that deters long-term institutional investors, and distract leadership from executing a long-range strategy. For private business owners seeking outside capital, misaligned investors can push for premature exits, demand risky growth strategies for faster payback, or undermine a company’s culture to boost margins.