Financial markets experience periods of volatility, which can create feelings of fear and anxiety. However, there are ways to combat these feelings. Financial guru and Berkshire Hathaway chief executive officer (CEO)—until he transitions to chairman on January 1, 2026—Warren Buffett’s methods have guided him through decades of financial booms and busts. Many people assume his success comes from unmatched intelligence, but the Oracle of Omaha himself insists otherwise.

One of Buffett’s key strengths is his emotional intelligence (EQ), the ability to remain calm, rational, and disciplined no matter what the market is doing. This article explores how Buffett applies EQ to investing, and how you can too.

Why Buffett Prioritizes Temperament Over Intelligence

In Berkshire Hathaway’s 1987 letter to shareholders, Buffett explained that investment success isn’t about following formulas or analysis.

“In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets,” wrote Buffett. “Rather, an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace.”

While financial insights matter, it’s an investor’s ability to manage emotions that prevents costly mistakes.

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Key Traits of Buffett’s ‘Emotional Intelligence’

Buffett’s EQ-driven approach can be summarized through four key traits:

• Patience: He’s willing to wait years and play the long game for the right opportunity rather than rush into trades.
• Discipline: He generally follows strict criteria for investments, focusing on long-term value and fundamentals rather than any sort of hype.
  Detachment: He avoids reacting too emotionally to headlines and market volatility.
• Self-awareness: He knows his “circle of competence,” avoiding any investments that he doesn’t truly understand.

Practical Ways to Apply Buffett’s EQ-Based Strategy

When practicing Buffett’s EQ-based strategy, there are several ways an investor can implement it effectively:

• Think long-term: Make investment decisions based on the long term, not the short term.
• Follow rules: Define your personal buying and selling logic in advance, then stick to it.
• Avoid news and media that push hype: Unfollow sources that encourage emotional actions when it comes to investing.
• Track your investment moves: Jot down your investment motives and moods in a journal so you can keep track of your decisions.

When Buffett’s Emotional Intelligence Was Tested

In the wake of the 2008 financial crisis, even Buffett’s EQ was challenged.

“By the fourth quarter [of 2008], the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country,” said Buffett in Berkshire Hathaway’s 2008 letter to shareholders. “A freefall in business activity ensued, accelerating at a pace that I have never before witnessed.”

While the U.S. and the world were experiencing one of the worst financial crises in years, Buffett was not immune to financial losses. However, he focuses on four key goals that keep him grounded, regardless of market conditions at the moment:

• Maintain sufficient liquidity and exposure to assets that pay earnings.
• Stick to investments in companies that offer a durable competitive advantage—a protective moat.
• Acquire new streams of income
• Expand Berkshire Hathaway’s pool of business managers who generate excellent results for the company.

Ultimately, Buffett’s calm and rational decision-making allowed him to seize financial value when other investors were panicking and making flawed financial decisions. Remember that practicing EQ requires consistency, not perfection.

Can Emotional Intelligence Be Learned?

EQ isn’t necessarily an inherent trait. However, it can be a valuable trait that one develops and learns over time. Investors can strengthen their own emotional intelligence by:

• Practicing mindfulness and meditation: These can help you stay emotionally grounded during periods of market volatility. 
• Reflection: Consider journaling to spot patterns in your decision-making, which may help you avoid emotional investment behavior.
• Creating decision checklists: Listing reasons for each investment can help you keep investment decisions aligned with your long-term goals.
• Seeking professional financial guidance: Consulting with a financial professional may help develop an investor’s EQ.

The Bottom Line

Buffett’s success isn’t about insider knowledge, following formulas, or even being smarter than other investors. It’s about developing emotional intelligence. By practicing patience, discipline, detachment, and self-awareness, investors can make decisions based on long-term goals and avoid costly mistakes. Emotional intelligence may be the most powerful investing tool an investor can develop, and it’s available to anyone willing to practice and put in the work.