5 Golden Rules for Investing Like Warren Buffett
Warren Buffett is the world’s most renowned investor. The legendary investor is the chairman and CEO of the largest holding company in the world, Berkshire Hathaway. His lieutenant is Charlie Munger, who is also considered one of the best investors in the world.
He has made his fortune solely by investing in stocks and became one of the richest men on the planet — His enormous net worth is $124 Billion (05/2022).
Buffett follows the value investing approach, one of the most popular and reliable investing strategies. The legendary investor, Benjamin Graham, was the one who taught him this strategy.
How does Buffett choose his stocks:
- Companies with an economic moat — Competitive advantage.
- Businesses that stood the test of time.
- Great ROE ratio relative to other companies in the industry.
- Efficiency — High profit Margins
- Relatively small debt. Buffett prefers that most earnings will be generated from equity and not from debt.
- Avoiding overvalued stocks. Buffett likes to pay less than the intrinsic value of the company.
Here you can see the stock portfolio of Warren Buffett and many other famous investors: Stocktika.com | Official website
More interesting facts about Warren Buffett:
- Every year Warren Buffett publishes a letter to Berkshire Hathaway shareholders. The letters contain timeless advice for investors, seasoned and novices alike. It can be found here.
- He was born on August 30, 1930.
- Friends from an early age have said that Warren demonstrated high mathematical capabilities, adding and multiplying large numbers in his head.
- He made his first investment at the of 11.
- In 1965 Buffett had assumed control of the textile company Berkshire Hathaway and turned it into a holding conglomerate.
- In 2006, he committed to gradually giving all of his Berkshire Hathaway stocks to philanthropic foundations.
Warren Buffett’s philosophy:
“It’s Far Better to Buy a Wonderful Company at a Fair Price Than a Fair Company at a Wonderful Price” Buffett’s first focus is on the company business, and then on the valuations.
“Never invest in businesses you can’t understand”
“If you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes”
“The market can price things wrong”
“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”