Quote of the Day by Warren Buffett: 'Risk comes from not knowing what you're doing'

Who is Warren Buffett  

Known as the “Oracle of Omaha,” Warren Buffett is one of the most successful investors of all time. Buffett formerly chaired Berkshire Hathaway.

He also stood out for his long-term investment philosophy, often summarised by his preference for buying “wonderful companies at fair prices” and holding them indefinitely.

Buffett’s influence went well beyond returns. He championed the idea that immense wealth comes with a responsibility to give back, something he practised through his philanthropy and the Giving Pledge.

When was this quote said by Warren Buffett?  

Warren Buffett first said this during a 1993 speech to graduate students at Columbia University Business School.

Buffett has a deep history with Columbia University; he studied value investing there under his mentor, Benjamin Graham, in the early 1950s, which is why he frequently returned to speak to their business students.

What does this quote mean?

Warren Buffett’s quote, “Risk comes from not knowing what you’re doing,” highlights that financial danger does not stem from market volatility itself, but from an investor’s own ignorance. He asserts that true risk arises when people invest in businesses, assets, or industries they do not fully understand, effectively turning investing into blind gambling.

By thoroughly researching a company’s fundamentals, competitive advantages, and intrinsic value, an investor can significantly minimize uncertainty. Ultimately, the quote serves as a powerful reminder to stay strictly within your “circle of competence” and prioritize deep knowledge over speculative trends.