Observations & Lessons From 2025
Reflecting upon the year, I’m amazed at what a capitalist society can produce. Although rarely a smooth ride, when one steps back to assess the decades, progress is clearly evident.
The Presidency: January welcomed a new president who was also the old president. Prior to the second Trump win, only Grover Cleveland had been the president, who lost his re-election bid and subsequently regained the presidency.
There is a legitimate argument to never give up. Most successes in the world are not delivered by the smartest person, but rather the one who is willing to outwork the problem. Whether you like Trump or not, never underestimate tenacity.
Tariffs: The first half of the year was dominated by tariff talks. April saw the markets plummet double digits as investors panicked over random and chaotic tariff threats by the Trump Administration.
The prediction betting site Polymarket indicated a 66% chance of the US economy dropping into a recession.
There has been no recession, the economy has remained strong. The financial markets quickly regained lost ground.
We have yet to see the true long-term impact of the tariffs.
Short-term, the tariffs will cause inflation which will be painful to those at the bottom end of the economy. However, long-term, it is possible that foreign companies may be incentivized to build factories and businesses in the US. In the process, this could create new jobs. Most likely, it will take a solid decade to see how this plays out.
People react fast, whether they possess sufficient information or not. But business fundamentals move slowly.
Presidents and Congress do not run the economy nor individual businesses. Investors must recognize that macro-economic predictions tied to political events are almost always exaggerated.
The news cycle creates volatility. However, time in the market will always be more important than timing the markets. The goal for wealth creation is patient ownership of productive businesses.
AI: Artificial Intelligence and big data hit the mainstream and continue rapid enhancement. My partner Warren said his 80-year-old father uses AI daily. Older generations appear more willing to embrace change this time versus how they embraced the internet.
AI will disrupt many entry level jobs. However, just like the internet revolution that decimated traditional newspapers, entire new industries popped up. AI will create jobs we haven’t even dreamed of. The need for sound judgement and wisdom will continue to be in high demand.
When assessing the commercial viability of AI, it is wise to study other inventions that changed how humankind operates. The invention of autos, airlines and the internet revolutionized our lives. However, they have been terrible investments. Just because something causes significant change does not mean it will be a good investment.
Buffett: In May, ninety-four-year-old Warren Buffett announced his “retirement” as Berkshire Hathaway’s CEO. He added he would continue as chairman. People close to Buffett anticipate he will come to the office every day, doing what he loves….analyzing businesses.
There have been numerous life and business lessons learned from Buffett throughout my 33-year investment career.
Regardless of your station in life, Buffett’s logic, wisdom and discipline are as relevant today as ever. Do yourself a favor and pick up any Berkshire Hathaway annual report and read the Chairman’s Letter. Access them here: BERKSHIRE HATHAWAY INC.
Buffett’s life is certainly worth studying. He has repeatedly counseled to find a job you love. Obviously, it has worked quite well over his eighty-four-year investing career.
Regardless of the stage in Buffett’s investing career, he has been the master of getting maximum value relative to capital deployed. This has required discipline, patience and an analytical mindset. As business models continue to morph and industries change, these are fundamental tenets for every investor.
Buffett has already donated $60 billion to charity. Upon his passing, he will leave nearly all his remaining $145 billion to charity.
However, Buffett isn’t the only charitable one. Americans collectively made charitable donations of over $592 billion in 2024, with 2025 likely to exceed that figure. The US continues to be the most charitable nation on the planet.
In spite of political turmoil and economic uncertainty, we made progress. It was often frustrating and illogical. Technological innovation, hard work, patience and capitalism continue to deliver economic amazement. And if you strike it big in the game of capitalism, share it with prudence and wisdom.
It will be interesting to see what 2026 has in store for us.
Dave Sather is a Certified Financial Planner and the CEO of the Sather Financial Group, a fee-only and fiduciary strategic planning and investment firm.
