When deciding whether or not to invest in a company, billionaire Warren Buffett looks for businesses that will continue to have a competitive advantage decades down the line. This "buy and hold" strategy is why Buffett says long-term investors in Apple shouldn't obsess over iPhone X sales.
"Nobody buys a farm based on whether they think it's going to rain next year," he said on CNBC's "Squawk Box." "They buy it because they think it's a good investment over 10 or 20 years."
Simply put, Buffett decides a business is worth investing in because it will last, not because it's doing well right now. He purchased See's Candies with longtime business partner Charlie Munger in 1972 and spent more than $1 billion on Coca-Cola stock in 1988 — both of which turned out to be good bets and both of which he still owns today.
"Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value," Buffett wrote in his 1996 letter to shareholders. "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes."