Made By Waren Buffet
5. BUY BUSINESS, NOT STOCK OR SHARE
According to Buffett, one of the important factors in successfully investing is to warn yourself that you are buying at least part of the business actually exists. Sheet stock itself does not have actual meaning. The stock is just representation of the company.
MUST think that when you buy shares of a company not graphic technical analysis, news and Bloomberg table or graph in the Wall Street. All you have to think about is the "value" and Performance behind a business.
Buffett always consider 4 things before deciding to buy the stock, namely:
1 Business that he can understand
2. Companies with long-term prospects of profitable
3. Management is honest and competent
4. Price (stock) is very interesting
Buying shares is part of the business. Therefore, do not buy stocks because the price movements, and do the fundamental analysis before buying any stock.
6. Look COMPANY THAT THE BEST FROM THE OTHER INDUSTRIES
Waren always want to find and buy the business that imperishable, which dominates the market, thus ensuring more success, where these products; required many people, does not require excessive capital, not a lot of similar goods, and not much affected by price regulation. But of course all of them executed while waiting until the company's stock price is considered reasonable.
It is recommended that you create a list of stocks, shares your drill, and do the monitoring costs as often as possible, until the price reaches the price that you consider good and reasonable, and .... HAP ..!!! The WOLF gets MEAT.
7. BUY LOW TECHNOLOGY COMPANY, NOT high
Waren hates is High technology companies and high internet company, because technology changes more rapidly create This kind of company is move behind the era and behind competitors, can cause FALL.
He prefers shares of companies bricks, paint company, carpet and furniture company that has a business that is easy to understand and cash flow that is easily predicted. Such companies can survive up to 100 years, because the product can be a lag period is not easy.
Fall of many dotcom companies, such as Etoys.com, Pets.com, RX.Com, etc. strengthen World.com Alibi Waren. What do you with Microsoft, Yahoo and Google?
Buffett advice: do not be tempted with a transaction that offers a wealth quickly, the company that involve complex relative (EXAMPLE High Tecnology Company), such companies are difficult to predict in the long term. Avoid business in the industry, which continues to change, and makes investment on business That live for many generation "old economy". And last, remember that takes tens of years for companies to become large.
8. CONCENTRATION YOUR STOCKS INVESTMENT
Almost all the experts recommend to do diversification, that is has a lot of STOCKS from many companies, that if a stock falls, it will not destroy all portfolio you have, but Buffett holds another.
If you've found the right stock, why you should buy a little? So he said. Buy 5 to 10 stocks with a good price, and buy as much as you can. Here he gives an example when buying a $ 144 million to shareholders China Petro-China oil companies. Unexpectedly, now worth $ 1.2 billion.
According to him, someone is invested in the property all the 3 companies that either (with the purchase price of the good), in the long term, then he can be rich future. This is also examplizeing by Buffett, He has 474,998 shares of the company, which Berhshire Hathaway holds for tens of years. Now one sheet of stock the price is $ 138,000. Please count the property itself from only one company. That is why Waren Buffett now the richest person in the world.
Continue to the edition 3 ... ....
Read More....