Want to Know Warren Buffett's Secret? Here it is.

Warren Buffett is widely believed to be the most successful investor during the 20^th century. So … if Warren Buffett wanted to tell you about a major key to his success, would you want to hear it?

If you were alive in 1984, you missed the boat! That’s right … Warren Buffett gave us his secret, and at the time he predicted that almost no one would listen to him. He was absolutely right.

Don’t worry; if you haven’t heard about this before, you’re not alone. During a speech in 1984 at the Columbia Business School, he said the following (which later became an essay): “The common intellectual theme of the investors from Graham-and-Doddsville is this: they search for discrepancies between the value of a business and the price of small pieces of that business in that market.” In other words, when Buffett is buying a stock, in his own mind he’s buying a business.

What are Graham and Doddsville? Graham is named after Benjamin Graham, who mentored Buffett while he studied in Columbia. Doddsville is the namesake of Dave Dodd, who wrote the preeminent book on security analysis with Graham.

In his essay, Buffett points out that during a study of the investors who consistently outperform the S&P 500 year after year, they seem to follow a similar strategy to that of Benjamin Graham. He writes, “While they have gone to different places and bought and sold different stocks and companies, they have a combined record that simply cannot be explained by random chance.”

According to Buffett, this “secret” really isn’t one at all. Despite this information being available for about 50 years, Buffett notes that “I have seen no trend toward value investing in the 35 years I’ve practiced it.”

Want to read the essay in full? Get it here.