Warren Buffett, who famously bought the country’s biggest railroad and Apple stock that’s now worth more than $100 billion, once pointed instead to two tiny personal investments that did nothing to alter his net worth — a 400-acre farm in Nebraska and retail real estate near New York University in Manhattan. Why? To illustrate that, whether big or small, his investment analysis always stays the same. In his annual letter to shareholders in 2013 , Buffett, chief executive officer of Berkshire Hathaway, highlighted a pair of real estate investments made decades ago. The first was a farm 50 miles north of Omaha that he purchased in 1986 from the Federal Deposit Insurance Corporation. The farm cost Buffett $280,000, a bargain after the 1980s bubble in farm prices burst, leaving many Iowa and Nebraska banks saddled with sour loans. Leaning on his son’s knowledge of farming, Buffett estimated the return from the farm to then be about 10% owing to improved productivity and higher crop prices. “I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside,” the so-called “Oracle of Omaha” wrote in 2013. Years later, “the farm has tripled its earnings and is worth five times or more what I paid. I still know nothing about farming and recently made just my second visit to the farm.” NYU retail The second investment Buffett discussed was a New York retail property that he co-purchased in 1993 through an introduction by Larry Silverstein, Salomon Brothers’ landlord when Buffett briefly stepped in as the investment bank’s CEO. The size of the purchase was reportedly about $1 million. Twenty years later, the investment proved lucrative. By 2013, Buffett reportedly had made over $1.5 million in special capital distributions from the property, on top of regular increasing payments. Here’s the kicker: he had never viewed the property. It may seem too good to be true, but Buffett said the analysis there was simple as well. He had calculated that the unleveraged current yield from the property was about 10%. “The largest tenant – who occupied around 20% of the project’s space – was paying rent of about $5 per foot, whereas other tenants averaged $70,” he said then. “The expiration of this bargain lease in nine years was certain to provide a major boost to earnings. The property’s location was also superb: NYU wasn’t going anywhere.” “If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on.” Key to investing Through telling stories of such specific assets, the legendary investor taught his followers that what matters the most to any investment is its future earnings. “Focus on the future productivity of the asset you are considering. If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on,” Buffett said. The same principle should apply to stocks, even though the stock market is more distracting and emotional, he said. Buffett, who at Columbia University studied under Benjamin Graham , the fabled father of value investing, always thinks of stocks as small portions of businesses. Buffett and his late business partner Charlie Munger would first consider whether they could sensibly estimate an earnings outlook five years out when deciding if an asset was worth buying, Buffett said. Another key message from these examples is having a long-term time horizon for investments. Or, as Buffett once put it: “When promised quick profits, respond with a quick ‘no.'” “Income from both the farm and the NYU real estate will probably increase in the decades to come,” he said a decade ago. “Though the gains won’t be dramatic, the two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren.”