How to Invest like Warren Buffet

How to Invest like Warren Buffet….

How to Invest like Warren Buffet is something that is worth knowing about. Warren Buffet is the one of the most successful investors who has ever lived, and yet so few admirers ever actually bother to learn HOW he invests. You’ll see a lot of scam artists who claim they can make more money in a month that he does in a year, and yet they don’t even come close to his net worth in the tens of billions of dollars.

How to Invest like Warren BuffetWarren Buffet is a shining example of how doing just a bit better than average over the long term will do so much more for your bottom line than trying to hit a home run every time. While Forex traders living in their Mom’s basement will boast that they make 70% a month (A TOTAL LIE), Warren has never sited such returns. In fact his career average is only around 25% annual. The reason Warren Buffet always seems to come out ahead, is because he has such a high level of CONSISTENCY! It’s just not about hitting the jackpot for him.

“Watch the playing field, not the score board.”

Warren has repeatedly called out Wall Street on their nonsense by pointing out how they obsess over short term news and price charts to make their decisions. Meanwhile, Warren Buffet’s mentor, Ben Graham, emphasized that intelligent investing is about looking at the actual business that’s being bought or sold.

Warren took what he learned from Ben Graham along with other great mentors, and basically came to one conclusion. Even though markets can go a little crazy in the short term, a business that is profitable, growing, and has a sustainable competitive advantage will eventually see it’s value realized in the market.

Warren cares very little about charts. He cares about how the actual business is doing. Is it profitable? Is it expanding? Does it keep enough cash on hand? Does it keep its debt under control? Can management be trusted? And most importantly…….do they sell something that the market will continue to pay for many years from now?

People still choose Coke over other beverages. They still buy Bic razors. They still ride the train. They still buy insurance. Warren isn’t interested in a quick buck. He puts it like this “If you wouldn’t own a business for 10 years, don’t own it for 10 minutes.”

Become a Learning Machine

Warren Buffet is able to understand the businesses he’s buying, and the industry their involved with for one very simple reason. He devotes himself to constant learning. He researches everything he can about the investment that interests him, and it’s what allows him to gauge whether the company is an investment that’s growing to perform magnificently. In contrast, traders usually could care less about a stock so long as the chart is cooperating. It’s a polar opposite philosophy.

Buy on Sale

“Price is what you pay. Value is what you get.” When Warren said this, what he meant is that there are times where a perfectly good company can simply go on sale. And he knows that because the market has mood swings from time to time, he can just wait for the next sale. Not only can he tell whether a business is likely to grow, but also when it’s selling for pennies on the dollar. That’s how he simultaneously lowers risk while increasing his overall return on investment.

The good thing is we small investors actually have a huge advantage over Warren. He has to find buying opportunities to park billions of dollars. Meanwhile, we can find opportunities all the time by looking for the next market mood swing.

Here’s how we track them

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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