Warren Buffet – 10 Things About Investment

Master The Basics

“To invest successfully,

Stuart Miles/www.freedigitalphotos.net

Stuart Miles/www.freedigitalphotos.net

you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses – How to Value a Business, and How to Think About Market Prices.

The Best Time To Buy A Company Is When It’s In Trouble

“The best thing that happens to us is when a great company gets into temporary trouble…We want to buy them when they’re on the operating table.”

Don’t Buy A Stock Just Because Everyone Hates It

“None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling. Unfortunately, Bertrand Russell’s observation about life in general applies with unusual force in the financial world: “Most men would rather die than think. Many do.”

Stocks Have Always Come Out Of Crises

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

Always Be Liquid

“I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.”

Buy Business That Can Be Run By Idiots

I try to buy stock in businesses that are so wonderful that an idiot can run them because sooner or later, one will.

Be greedy when others are fearful

“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.

You don’t have to move at every opportunity

“The stock market is a no-called-strike game. You don’t have to swing at everything–you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing, you bum!'”

The more you trade, the more you underperform

Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.”

A Good Businessperson Makes A Good Investor

“I am a better investor because I am a businessman and a better businessman because I am no investor.”

This Is The Most Important Thing

“Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1

Source: Business Insider

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About Abayomi Jegede

Abayomi is the founder of Leaders Hub, he is a leadership and personal development expert. Abayomi as a writer and motivational speaker has a passion for helping people especially youths discover their inner leader and maximize their potential. Having worked for three dynamic organizations, he has discovered that a lot of people spend their lives doing all the wrong things and being in all the wrong places. He is on a mission to bring out the best in people by helping them achieve their purpose . Connect with Abayomi on Facebook, Twitter and Google+

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