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NOW,Invest Like Warren Buffett - Warren Buffett’s 5 Principles And Rules For Investing


Invest Like Warren Buffett - Warren Buffett’s 5 Principles And Rules For Investing

Invest Like Warren Buffett - Warren Buffett’s 5 Principles And Rules For Investing how to invest like Warren Buffett Ive spent many years of my life studying Warren Buffetts investment philosophies and strategies and one of the books I recommend you to read is the snowball one Buffett and the business of life another thing that Ive done is over the years I have always studied his annual shareholder letters to all the pressure Hathaway shareholders if you want to study and understand Warren Buffett in his own words how he sees business how he sees investments I think thats the best resource so today Im gonna share with you Warren Buffetts five principles and rules for investing Warren Buffett investing principle number one never lose money investing rule number one never lose money rule number two never forget rule number one you have to understand one Buffett doesnt just look at we turn on investments he also looks at we turned off investment meaning how safe is this investment gonna be in five years ten years in years and Warren only invest in
What he understands even though theres so many opportunities come across his table and some of those attempting but one doesnt look at those he only invests in
What he understands you see most people they approach investing like theyre going to Vegas by theyre gamblers theyre not investors they go into the stock market thinking about well you know
What how quick am I gonna make a quick buck right how quick am I gonna make my money versus having that longterm deal you hear this from gamble a lot right to go to Vegas and say you know
What Im gonna bring three thousand dollars and Im gonna stop once I lose all that 3k a lot of people approach the stock market its the same attitude Im gonna lose xmi dollars then Im gonna be done well thats not how we approach investing Buffetts rule number one never lose money Warren Buffett investing principle number two stick with longterm value investing now this is not sexy but one Buffetts been preaching and talking about this for years and now after years you can see his wealth compounding every year and it talks about pretty much the same thing you could see he doesnt change a
Whole lot he doesnt focus on the daily ups and downs in my a place you see Warren Buffett focuses on longterm value investing in fact he is famous for saying
When people ask him hey one how launch at a homeless talk and he replies our favorite holding period is forever Warren Buffett investing principle number three invest like youre buying the entire company so instead of your thinking buying some shares youre buying the stock imagine if you actually buy the entire company would you pay
What you pay for the company the share prices if you calculate hmm is this a good deal now if you think it from that perspective theres a lot of height you would avoid you will not be so excited again or psyched up and hyped up about a certain stock that you know its overpriced thinking about from a perspective speculation youre like you know
What maybe Ill bite at this price Im gonna sell at that price youre thinking about that particular stock price instead of thinking Im gonna buy the entire company
What I pay that kind of price
What I pay that kind of multiples for the company chances are no if youre not gonna spend that kind of money and a rageous price for the entire company
Why would you spend an outrageous price for the stocks think about it Warren Buffett says its far better to buy a wonderful company in a fair price than a fair company at a wonderful price Warren Buffett investing principle number four invests companies with competitive advantages to Warren Buffett the worlds divided into two great businesses and everything else in fact during an interview he said I look for simple businesses with consistent performance and favorable longterm prospects now thats very profound you think about it simple businesses
What makes a business great according to Warren Buffett
While first a great business is simple its simple to understand
What they do is simple to understand their business model how do they make money so think about an wand were not so sure how it makes money but you and I can probably be pretty accurate exactly how cocacola makes money how Starbucks money its very easy to understand the business model second a great business has brand recognition
When you think about Cola you think about Coca Cola
When you think about blue jeans you might think about Levis
When you think about fast food you might think about McDonalds
When you think about running shoes you might think of Nike a business there has brand recognition those are great businesses it means that they occupy mindshare in the consumers mind
When consumers think about buying some types of products they think of that brand well thats a great business third a great business has pricing power it means this business has the power to increase prices without losing a lot of customers it means they are the leaders in debt industries theyre not competing based on price theyre competing based on value now thats very critical because it means over time this business will earn more and more and more profits and theres enough profit margins for them to grow well one buffer looks at that as well one Buffett says if youve got the power to raise prices without losing customers to a competitor youve got a very good business if you have to have a prayer session to even increase your price by well then youve got a terrible business one Buffett investing principle number five keep cash on hand one of the things Ive learned from Buffett that I love is
When he said be fearful
When others are greedy and be greedy
When others are fearful now you cannot take advantage of the marketplace if you dont have cash on hand because
When theres a market correction usually is unpredictable so how do we take advantage of it weve got to have capital and the best time to buy a stock its
When there is a bear market that you know this blood right on the street thats
When you go in thats
When you can buy good companies buy good shares at a discount but most people because of fear because of the height because of the media because the news theyre afraid oh my god no ones buying the economy is bad and theyre so afraid
What they dont understand if you study history theres always cycle right economy theres always cycle now youre not gonna time at the very bottom of the market and get out at the top I mean
What everybodys trying to do that its very very difficult but if you have a long term viewing you follow some of these principles then the likelihood of you being successful its an investor its much higher now on my channel I usually talk about high income skills I talk about how you can increase your income how you can close more sales and how to grow your business I havent done a lot of videos on investing if this is something that you want to learn more of and if you a fan of my work then comment below hit the like button so I know you enjoy videos like this then in the future I would consider making video series on just investing on one buffer than other people as well if this is
What you want comment below and let me know '