Warren Buffett’s Investment Practices
Posted on April 25, 2008 in Business and Finance by Shewli
Buffet is the richest man after amassing a wealth of $65 billion dollars through investments. According to Buffett investment requires common sense, patience and independent research. The following tips worked for him and may work for others as well:
• Invest with your gut feelings. Understand the business before you invest.
• Avoid making losses. There is no point in investing in stocks, which you would not keep for a longer period.
• Believe in your own decisions. You do no have to depend on other analyst’s opinion.
• Invest in companies which will be there in business for a longer period of time
• Be cool. Don’t panic. You need to maintain your equanimity.
• To invest in stock markets you need not be a genious. All you need is patience.
• Look for long term investments. Get to know the history and performance of the company before you invest your shares in that company.
• Above all the top level management in the company should be good. Their decision making influences the performance of the company.
• Make your analysis and base your judgement on that.
• Investment in businesses you understand. Avoid businesses that you don’t understand and are complex.
• Have patience. Stocks will fall and rise. Wait for long term gain.
• Don’t look at the price of stocks rather look at the value it is going to create. This attitude would keep you remain cool even when the stocks are fluctuating.
• Invest in companies that have future potential and are performing well. Do not focus on companies that are diversifying.
• Do not buy too many stocks, rather put more money in fewer stocks.
• Buy when the market is low.
• Sometimes you should to remain a spectator.
• Keep yourself informed and sharpen your skills by learning from your past mistakes
• Read as much you can. By doing this you are packed with information necessary to make the best decisions.
• Don’t rush to make an investment. Be patient.
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