We can’t deny the fact that Warren Buffet knows more than us on success. He is a billionaire investor whose net worth is $76 billion and his inspiring business acumen has inspired people a lot about investment. He is popular for his long-term investment techniques like encouraging dollar costs which boosts the regular buying of the same investment through a long period of time. He is also a person who has holdings in companies like Apple, Coca-Cola and American Express.
If you take a look at Warren Buffet’s thoughts on intrinsic value, you’ll get to know how big an investor he was and how he preaches others to be. Apart from his helpful internet advice, here are few things that Warren Buffet shares to you about leading a successful life. Here are few things to learn from him.
#1: Taking risk is not always beneficial
Warren Buffet is of the opinion that you can invest 10% of your cash in short term investment bonds and 90$% in index funds like the S&P. This is his personal belief that this kind of investment strategy will yield best possible returns. In fact, he is so much confident about this that he had instructed the trustee of his personal will to follow this after his demise.
#2: Keep measuring your performance
Regardless of whether you perform a good job or a bad one, you have to measure to determine whether or not you’re positive or negative for the year. He also advises you to measure against the usual experience in securities as done by Dow Jones Industrial Average. If you think that your record is far better than that, you should deem it to be a good year. On the contrary, if you perform poorer, you deserve an improvement.
#3: Think about the bigger picture
Over a certain period of time, there will be good years along with the bad ones. You shouldn’t be enthusiastic or depressed about the sequence in which it occurs. Begin to think of your stocks in terms of the bigger picture and outperforming the market will be nothing but a sign to show that you’ll be heading towards the correct direction, even when you deal with negative or flat numbers.
#4: Don’t purchase the stock price but the business
It can only be said that the secret has been there in the market for 50 years and yet they haven’t seen any such trend towards value investing since the last 35 years. There are few perverse human characteristics which prefer to make the simple things tough. As long as Warren Buffet is concerned, good investment is all about understanding the ways of the business rather than just focusing on the stock price.
The truth is that there are very few people who are concerned about their investment strategies and they find it tough to follow someone else’s ideologies. If they’re interested in making profits as an investor, they should follow the strategies of Warren Buffet.
