Wednesday, 27 March 2013

10 Points on Warren Buffett's Investing

  1. Warren only invests in stuff that he understands.
  2. He doesn’t trade, he invests!
  3. His main decision making source are Annual Reports
  4. He only buys at a “good price”.
  5. He only buys things with the intention to hold them forever (no rule without exception).
  6. He holds 8% of Coca-Cola and is absolutely certain that the value of Coca-Cola will increase substantially over the next 20 years, i.e. there is no reason to sell.
  7. He only invests in simple business models (beverages, sweets, chewing gums, insurance).  If he doesn’t understand the industry, he doesn’t invest.  E.g. he doesn’t invest into technology/internet companies.
  8. He can make a purchase decision in 5 – 10 minutes.  He doesn’t overanalyze companies.  He doesn’t negotiate very much.  When the price that is offered to him is okay, he buys immediately.  When he offers a price, it’s often non-negotiable and he expects very fast decisions.
  9. He recommends not to listen to stock recommendation.  If you do that, you’re playing and not investing.
  10. He still lives in the same house he bought as a 25 year old. 

I will definitely read and listen to more stuff of and about Warren!  There are some very important lessons to learn!

Warren Buffett MBA-Talk

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