Investments Warren Buffett Avoids and Why
Warren Buffett didn’t become one of the world’s richest men by chasing trends. He built his fortune by saying “no” to the wrong things and sticking with boring investments that actually worked.
In this gallery, you’ll see the types of investments Warren Buffett consistently avoids and the exact reasons behind each one.
👉 Click or Scroll through to see which investments Buffett has refused for years, and how that wisdom could save you thousands.
Table of Contents
What I Learned Watching Buffett for 20+ Years
As a teenager, I read every Buffett book I could get my hands on and spent hours studying his strategies in the library. I followed that same approach through my 20s and 30s: quiet investing, no hype, and compound growth doing the heavy lifting.
That strategy paid off. I became a liquid millionaire by 38 and retired at 42. But the biggest lesson wasn’t just about what to buy, it was about what to avoid.
👉 Keep going. These “no” investments might look exciting, but Buffett had good reasons to walk away.
Buffett Avoids Short-Term Trading
Warren Buffett calls short-term trading a “fool’s game” and he’s never played it. He’s not trying to time peaks and dips or chase headlines. His strategy is built around buying great companies and holding them long enough for compounding to do the heavy lifting.
He’s said his favorite holding period is “forever,” and he means it. Quick flips bring stress, taxes, and dumb decisions. Buffett plays the long game because it’s the only one that actually builds wealth.
I Retired at 42 Because I Never Spend Money on These Things
Buffett Stays Away from IPOs
Initial public offerings (IPOs) are exciting, but Buffett wants nothing to do with them. He’s said that most IPOs are overpriced and benefit the sellers, not the buyers. By the time regular investors get in, the real upside is gone.
Buffett prefers to wait until a company proves itself with real earnings and staying power. If something is making headlines and flying off the hype train, he’s already out of the way.
Noise doesn’t build portfolios, discipline does.
Buffett Won’t Touch Tesla Stock
Buffett has never been tempted by Tesla. The numbers don’t add up, and the CEO behavior doesn’t help. He once said, “It takes 20 years to build a reputation and five minutes to ruin it” and Elon Musk’s impulsive style is exactly what Buffett avoids.
He also doesn’t like businesses that rely on constant reinvention to survive. Tesla’s stock price is built more on narrative than earnings, and that’s never been Buffett’s game. He wants durable profits, not drama.
15 Habits Warren Buffett Says Could Be Costing You Long-Term Wealth
Buffett Avoids Tech Startups
Buffett stays away from tech startups for one simple reason: they’re unpredictable. He doesn’t want hope, he wants proof. For years, he skipped Amazon and Google because their earnings were too volatile and their valuations didn’t make sense.
Apple eventually made it into his portfolio, but only after it became a stable, cash-generating giant. Even then, he sold $80 billion worth in 2024, showing that his caution never disappeared.
Buffett doesn’t chase trends. He waits for businesses to prove they’re built to last.
Video: How To Become a Billionaire According to Warren Buffett
Buffett Has No Love for Cryptocurrency
Buffett’s thoughts on crypto are crystal clear: “rat poison squared.” He doesn’t touch assets that don’t produce real value, and Bitcoin doesn’t generate income, pay dividends, or do anything that fits his definition of investing.
While Berkshire Hathaway did invest in Nu Holdings, a Brazilian digital bank with some crypto exposure, Buffett wasn’t betting on Bitcoin. He was buying a business, not a token. If it doesn’t generate cash flow, he’s not interested.
22 Purchases Frugal Millionaires Often Refuse To Buy
Buffett Warns Against Derivatives
Derivatives helped crash the global economy in 2008, and Buffett saw it coming. Years before the meltdown, he called them “financial weapons of mass destruction.” These contracts are complex, risky, and often misunderstood even by the people trading them.
Buffett avoids most derivatives because they create hidden dangers. He likes clear math and simple business models. If you need three whiteboards and a law degree to explain an investment, it’s probably not worth doing.
Buffett Doesn’t Believe in Gold as an Investment
Gold has never impressed Buffett. He calls it an “unproductive asset” because it just sits there collecting dust. It doesn’t earn, grow, or contribute to the economy, so it doesn’t belong in his portfolio.
His brief move into Barrick Gold in 2020 wasn’t about gold itself, it was about a profitable mining company. And even then, Berkshire dumped the position within months. Buffett wants assets that pay him, not shiny metal that relies on fear to stay valuable.
🙋♂️If you like what you are reading so far, subscribe to the DadisFIRE newsletter and follow DadisFIRE on YouTube.💪
Buffett Pulled Out of Airline Stocks
Buffett once believed airlines had finally matured into decent investments. In 2016, Berkshire bought shares of Delta, United, Southwest, and American. Then 2020 hit, and he dumped them all at a loss.
Even after air travel bounced back, Buffett didn’t return. He called the industry too capital-intensive, too dependent on fuel costs, and too fragile when things go wrong. For him, the airline business still doesn’t fly.
Buffett Won’t Bet on Commodities
Buffett has always avoided raw commodities like oil, coal, or wheat. He doesn’t like assets whose value is based on external forces like war, weather, or government policy. Those price swings are too random, too unstable.
He prefers owning companies that use commodities, not the commodities themselves. That’s why he buys railroads and refineries, not barrels of oil. Commodities don’t compound wealth, they just swing.
Warren Buffett Explains Exactly How He’d Make $30 Billion If He Started Over With $10,000
Buffett Avoids Currency Speculation
Buffett has openly criticized betting on currencies. “We would not really invest in a currency that is going to ‘hell’,” he said in 2023, referring to the U.S. dollar’s declining value. His concern? Washington’s fiscal policy and mounting debt.
He doesn’t trust markets where value is tied to political dysfunction. Currency trades are zero-sum and heavily manipulated. Buffett sticks to businesses, because a good company, unlike a currency, can keep growing no matter who’s in office.
Related Video: What Does Warren Buffett Think About the American Economy?
Buffett Avoids What He Doesn’t Understand
This is one of Buffett’s core rules: never invest in businesses you can’t explain in plain English. That’s why he avoids biotech firms, exotic hedge funds, and anything built on speculation instead of fundamentals.
If he can’t understand the business model in five minutes, he moves on. This isn’t a lack of intelligence, it’s discipline. Most investing mistakes start when people pretend they’re smarter than they are.
Avoiding Bad Investments the Buffett Way
Buffett didn’t get rich by being aggressive, he got rich by being selective. His biggest wins didn’t come from taking wild bets, they came from passing on bad ones. And he’s had the discipline to keep saying “no,” even when others were all in.
If you want to build real wealth, it’s not just about picking winners, it’s about skipping the losers. Buffett already showed us the blueprint. All that’s left is to follow it.
🙋♂️If you like what you just read, subscribe to the DadisFIRE newsletter and follow DadisFIRE on YouTube. 💪 Also be sure to follow DadisFIRE on MSN💰
