Warren Buffett's Simple Test Every Stock Should Pass Before You Buy in 2026

Core Insights - Warren Buffett stepped down as CEO of Berkshire Hathaway after a long and successful tenure, recognized as one of the greatest investors due to his exceptional capital compounding abilities [1] Investment Philosophy - Retail investors can emulate Buffett's investment philosophy by following a simple test before purchasing stocks in 2026 [2] - Understanding the business is crucial; Buffett only invests in companies within his "circle of competence," which serves as a stringent filter for investment decisions [4][8] - Acknowledging the limits of one's knowledge is important; Buffett avoided technology stocks for a long time due to their rapid changes and unpredictability [5] Investment Strategy - Apple was an exception for Buffett, as he recognized its strong brand and loyal customer base; Berkshire also invested in Alphabet, indicating a cautious approach to tech investments [6] - Berkshire's portfolio primarily consists of consumer brands, financial institutions, and energy companies, reflecting Buffett's deep expertise in these sectors [7] - Thorough understanding of a company aids in stock selection, including knowledge of products, market operations, distribution strategies, growth potential, profit trends, and management performance [8][9]