He doesn’t gamble in the stock market; he doesn’t take short-term, technical positions betting on immediate spikes or dips. He is not a buy-and-hold mutual fund investor. Warren Buffett is a long-haul business investor who takes partial, if not whole, positions in companies with favorable underlying economics, good management, and consumer monopolies.

Warren Buffett as Your Small Business Consultant

To draw a quick distinction between a Buffett-style investment and one that is not, ask yourself this question: “In 20 years, is it more likely that consumers will be drinking Coke or using the iPhone?” This question is not designed to play favorites. It is meant to illustrate the guts of the Warren Buffett investment methodology, and if you can understand the reasoning behind the answer, you will be well on your way to building a small business that Warren Buffett would love. In 20 years, is it more likely that consumers will be drinking Coke or using the iPhone?