10 Investment Tips from Warren Buffett, the World’s Most Successful Investor

February 4, 2012 by  
Filed under Featured, Finance

Warren Buffett is often regarded as the most successful investor in the world, and he is Forbes #3 world’s richest billionaires in 2011, with a net worth of US$39 billion. Warren Buffett is the chairman and CEO of Berkshire Hathaway, a large holding company with diverse interest in the food, insurance, utilities, and industrials sectors.

Warren Buffett’s investment principle is simple – he looks for quality companies that are undervalued on the stock market, buys and holds them for the long term, which is an investment method referred to as value investing. He focuses on the fundamentals and management of the company, rather than the volatile activities of the stock market.

Here’s 10 investment tips from Warren Buffett:

#1

“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”

#2

“The market is there only as a reference point to see if anybody is offering to do anything foolish. When we invest in stocks, we invest in businesses.”

#3

“Price is what you pay. Value is what you get.”

#4

“It doesn’t have to be rock bottom to buy it. It has to be selling for less than you think the value of the business is, and it has to be run by honest and able people. But if you can buy into a business for less than it’s worth today, and you’re confident of the management, and you buy into a group of businesses like that, you’re going to make money.”

#5

“Be fearful when others are greedy and greedy when others are fearful.”

#6

“Investment must be rational; if you can’t understand it, don’t do it.”

#7

“I read annual reports of the company I’m looking at, and I read the annual reports of the competitors – that is the main source of material.”

#8

“Wonderful castles, surrounded by deep, dangerous moats, where the leader inside is an honest and decent person. Preferably, the castle gets its strength from the genius inside; the moat is permanent and acts as a powerful deterrent to those considering an attack; and inside, the leader makes gold but doesn’t keep it all for himself. Roughly translated, we like great companies with dominant positions, whose franchise is hard to duplicate and has tremendous staying power or some permanence to it.”

#9

“We like to buy businesses. We don’t like to sell, and we expect the relationships to last a lifetime.”

#10

“My favorite time frame for holding a stock is forever.”

More about Warren Buffett

Learn more about Warren Buffett and his investment principles from these books:

The Warren Buffett Way, Second Edition

The Warren Buffett Stock Portfolio: Warren Buffett Stock Picks: Why and When He Is Investing in Them

Warren Buffett Speaks: Wit and Wisdom from the World’s Greatest Investor

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage

Watch this short video introduction of Warren Buffett:

Images: Screenshot of video

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