'Don’t ask the barber whether you need a haircut': Warren Buffett on developing insight

Legendary American investor Warren Buffett's famous words during Berkshire Hathaway’s 1994 annual meeting “Don’t ask the barber whether you need a haircut" was one of his best pieces of advice to investors.

Buffett has always held that "experts" or agents have vested interests when it comes to business which is why it is important to do one's own research. "Don’t trust forecasts or projections, especially from someone who has a financial interest in making those projections," he had said.

The chairman and CEO of Berkshire Hathaway urged investors to develop their own insight whether buying a stock or a house or a business.

At the 1994 annual meeting, Buffett's longtime partner Charlie Munger told the audience that they were once offered a thick book of $2 million worth of projections during the process of buying a business.

"We almost paid $2 million not to look at it," Warren Buffett joked to the audience. "I do not understand why any buyer of a business looks at a bunch of projections put together by a seller... or his agent."