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Warren Buffett's Tips

Warren Buffett's Tips

Every investor, especially a beginner, wants to find some kind of reference point in the world of investing. Not in order to blindly trust his actions and create a kind of idol for himself, but in order to better understand the market and learn more behaviors.

 

One of these landmarks, of course, is the Oracle of Omaha Warren Buffett, who objectively earned the title of a real investment guru. That is why, I suggest that dear readers get acquainted with a number of fairly accurate phrases expressed by Buffett, because armed with them, we will be able to more clearly understand what investing is.

 

Buying an asset does not mean that you will always own it!

 

"Sometimes comments from shareholders or the media imply that we have bought certain assets 'forever,'" Buffett wrote in his annual letter to shareholders. - ... but we have made no commitment, Berkshire should not hold any securities to anyone forever."

 

However, that doesn't mean we should sell the stock right away... A real investor thinks very differently... He is in a state of constant assessment of the quality of his assets and at every opportunity weighs the decision to sell it. And when there comes a crucial moment and the decision to sell, taking into account intuition, logic, market analysis or anything else, he does not think and does not regret, but takes and sells, earning his money on it.

 

The U.S. Economy Remains Dynamic

 

Buffett is in his 90s and it is not surprising that he, as a loving grandfather, is optimistic about future generations and once said the phrase that babies born today in America are the most successful harvest in history.

 

At the same time, Buffett is extremely positive about innovations and new businesses that positively affect the economy and allow it to remain dynamic.

 

All promotions must be checked in small!

 

Seemingly absolute nonsense, the phrase actually means a fairly simple truth - invest only in what you understand. At the same time, "small check" is nothing more than the process of explaining to representatives of the company in which you want or plan to invest, the principle of operation of your asset with chalk on the board.

 

Based on this unforgettable principle, Buffett for a long time fundamentally did not invest in technology companies, but a few years ago, Apple shares became a serious part of the Berkshire portfolio.

 

Even though he has avoided tech companies in the past because they didn't pass the "crayon test," he has increased his stake in Apple (AAPL).

 

Don't give in to fear

 

Emotions can cause investors to make panic decisions, which can cost them dearly in the long run. Buffett once said, "Be afraid when others are greedy, and be greedy when others are scared."

 

In his last letter, Buffett reminded investors: "In scary times, you should never forget two things: the first is widespread fear is your best friend because it promotes bargains, and the second is personal fear – it is your enemy, because it can be completely unfounded."

28.10.2021
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