Warren Buffett

Concur with the view of the writer that Action still constitute the vital element towards fruitful investment success.




Buffettology: Warren Buffett Quotes & Value Investment Strategy for Stock Picks
By Kurtis Hemmerling

Secrets to Investing Success



Since Warren Buffett has never personally penned an investment book for the masses, how does one go about learning his secrets? Luckily, many of his letters to shareholders, books that compile such letters, and insights from those close to him are readily available to the public.


Clearly, Warren Buffet is a value investor.


He looks for great companies, or “wonderful” ones as he puts it. 





He is NOT looking at hot sectors or stocks that may shoot up now, only to cool and fall later. He wants an efficient running business that has favorable long-term prospects.



Additionally, although he wants great stocks, he does not want to pay a premium price.

Warren uses a specific calculation to arrive at a fair valuation, then waits until a market correction or crash puts those prices on his doorstep.



many people who love the “Warren Buffett investing style” choose to invest on their own.

If you are excited by

~~ due diligence,

~~~ scanning thousands of stocks for that highly profitable (and oftentimes mundane) business,

~~~~ forecasting company earnings,

~~~~~ and monitoring the company’s progress,

then the “Warren Buffett investment method” may be a perfect fit for you.



==> Remember, perhaps above all else, to have GUTS of steel when the Market Drops so that you can buy UNDERVALUED and PROFITABLE stocks.


Full detail of the article:
www.moneycrashers.com/buffettology-warren-buffet-quotes-investment-strategy-stock-picks/


List of Warren Buffett's current portfolio
www.gurufocus.com/holdings.php?GuruName=Warren+Buffett

Insightful view of Warren Buffett to invest in businesses with strong underlying fundamental value through enjoying the benefits of both the capital gain & dividend payments.


Warren Buffett in annual report, 2011:



2 Categories of investment possibilities enjoy maximum popularity at peaks of fear:





~~ Terror over Economic Collapse drives individuals to currency-based assets, most particularly U.S. Obligations, and



~~~~ fear of Currency collapse fosters movement to sterile assets such as gold.





We heard “cash is KING” in late 2008, just when cash should be deployed rather than held.

Similarly, we heard “cash is TRASH” in the early 1980s just when fixed-dollar investments were at their most attractive level in memory.



On these occasions, investors who required a supportive crowd paid dearly for that comfort.



(1) Investments that are denominated in a given currency include money-market funds, bonds, mortgages, bank deposits, and other instruments.



Most of these currency-based investments are thought of as ‘safe.”



In truth, they are among the MOST DANGEROUS of assets.



Their beta may be zero, but their Risk is huge.



Over the past century these instruments have destroyed the purchasing power of investors in many countries, even as the holders continued to receive timely payments of interest and principal. This ugly result, moreover, will forever recur. Governments determine the ultimate value of money, and systemic forces will sometimes cause them to gravitate to policies that produce inflation. From time to time such policies span out of control.



Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 I did at that time.



Under today’s conditions, therefore, I do not like currency-based investments. Even so, Berkshire holds significant amounts of them, primarily of the short-term variety.



We primarily hold U.S. Treasury bills, the only investment that can be counted on for liquidity under the most chaotic of economic conditions. Our working level for liquidity is $20 billion; $10 billion is our absolute minimum.





(2) Second major category of investments involves asset that will NEVER PRODUCE ANYTHING, but that are purchased in the buyer’s HOPE that Someone else - who also knows that the assets will be Forever Unproductive – will Pay More for them in the future.





Tulips, of all things, briefly became a favorite of such buyers in the 17th century.



- This type of investment requires an expanding pool of buyers, who in turn, are enticed because they believe the buying pool will expand still futher.
- Owners are NOT inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future.



The major asset in this category is GOLD, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful).



Gold, however, has 2 Significant Shortcomings, neither of much use nor procreative



True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.



What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth - for a while.



Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling.



But bubbles blown large enough INEVITABLY POP.




And then the old proverb is confirmed once again: “WHAT THE WISE MAN does in the Beginning, the FOOL does in the END.”




My own preference – and you knew this was coming – is our third category: investment in Productive assets, whether BUSINESSES, FARMS, OR REAL ESTATE.






Ideally, these assets should have the ability in inflationary times to Deliver Output that will Retain its Purchasing-Power Value while requiring a minimum of new capital investment.

Farms, real estate, and many businesses such as Coca-Cola, IBM and our own See’s Candy meet that double-barreled test.

Certain other companies – think of our regulated utilities, for example – fail it because inflation places heavy capital requirements on them. To earn more, their owners must invest more.


Even so, these investments will remain superior to nonproductive or currency-based assets.



Whether the currency a century from now is based on gold, seashells, shark teeth, or a piece of paper (as today), people will be willing to exchange a couple of minutes of their daily labor for a Coca-Cola or some See’s peanut brittle.

In the future the U.S. population will move more goods, consume more food, and require more living space than it does now. People will forever exchange what they produce for what others produce.



Our country’s businesses will continue to efficiently deliver goods and services wanted by our citizens.Metaphorically, these commercial “cows” will live for centuries and give ever greater quantities of “milk” to boot. Their value will be determined not by the medium of exchange but rather by their capacity to deliver milk.



Proceeds from the sale of the milk will compound for the owners of the cows, just as they did during the 20th century when the Dow increased from 66 to 11,497 (and paid loads of dividends as well).



Berkshire’s goal will be to increase its ownership of first-class businesses. Our first choice will be to own them in their entirety – but we will also be owners by way of holding sizable amounts of marketable stocks.



I believe that over any extended period of time this category of investing will prove to be the runaway winner among the three* we’ve examined. More important, it will be by far the safest.





www.berkshirehathaway.com/letters/2011ltr.pdf

Excerpt of the article on Top 3 investing mistakes to avoid
by Warren Buffett.

With a sizeable trading loss raked up with the Midas touch mindset more than a decade ago, :(I concur wholeheartedly with the sage's golden advice:

But to really profit from stocks and build wealth over time, says Buffett,

==> individual investors must AVOID Making COSTLY Mistakes that Shrink their portfolio balances,

just as a football team that wants to boost their odds of winning must Avoid fumbling the ball away, Throwing an interception or Taking a Penalty at a bad time.

Risk comes from Not knowing what you're doing." - Warren Buffet

Building wealth in stocks is still the way to go, even though the ride can get bumpy from time to time, Buffett, 83, says.


"Doing reasonably well investing in stocks," Buffett says, "is very, very easy."

"Buy an index fund, preferably over time, so you end up owing good businesses at a reasonable average price," says Buffett. "And that is all you have to do."


That's it? It's that simple? Buffett says yes.


www.usatoday.com/story/money/personalfinance/2013/10/26/warren-buffett-investment-advice/3188499/

Insightful advices on the slow and steady way towards accumulating riches from investing shared via valuebuddies forum, rather than the get rick quick scheme actively advertised in the market.

If you want to learn about investing, learn from the best - Warren Buffett. Who did Warren learn from? Benjamin Graham and Philip Fisher. So read the writings of these 3 investing legends. If you can understand and apply their ideas, you will not do poorly, and it is possible that you may do very well indeed.

Buffett's writings:
Berkshire Hathaway shareholder letters
The Essays of Warren Buffett (a compilation of the same letters by Lawrence Cunningham)

Graham's writings:
The Intelligent Investor (a must-read for everyone)
Security Analysis (for professionals)

Fisher's writings:
Common Stocks and Uncommon Profits

As for the investment courses, are they run by investors with easily verified track records? That should give you a clue as to whether the speakers/trainers actually know how to invest.

==> People who are successful investors don't normally waste their time running courses - they make far more money using their time to invest. If they Teach at all, it is usually for FREE, to Help Other People.

Anyone who charges meaningful fees is probably making a living from teaching, not investing.

I would suggest reading The Intelligent Investor as a first step. No less than Warren Buffett himself has endorsed it. After that, learn accounting (either in a school setting or on your own) so that you can understand financial statements.

By the way, don't expect to get rich from investing. Investing can compound money to many times its original sum, but if you start with a very small sum it's not going to matter much. To get money for investing you'll need a job that pays enough that you can put aside money to invest.

- So first concentrate on increasing your earning power before you think about investing.

1. Work hard to increase your income

2. Save harder to increase your savings

3. Invest wisely to increase your net worth.

Note the sequence. Investing is not a substitute for your job - unless you are actually a fund manager.

The list of people who got rich off investing alone is depressingly short, and even the guy at the top of it, Warren Buffett, made his fortune first from business (he was a hedge fund manager and earned fees from his clients). Buffett put $100 into his partnership when he started. When he wound it up he had $25m. That money came from fees, not from merely compounding $100.

In contrast, the rich list is dominated by businessmen. So if you want to get rich, go into business. Investing alone will not make you rich unless you invest money for others, in which case your income is not from your own investments but from the fees you charge.
www.valuebuddies.com/archive/index.php?thread-2156-5.html

Easy to say Buy Low Sell High, but in investing Majority find the reverse easier to practise.
I am learning to control the emotional attachment that ruin my opportunity to attain millionaire after numerous rounds of roller coaster rides.  

Warren Buffett: Top 3 investing mistakes to avoid
Adam Shell, USA TODAY 6:06 a.m. EDT October 26, 2013

Imagine having Warren Buffett as your personal financial adviser. USA TODAY asked the Oracle of Omaha to put on his personal finance hat and tick off the biggest mistakes investors make.

NEW YORK — Warren Buffett, the billionaire investor with the Midas touch, has a message for Main Street stock investors: "Don't beat yourself."

"The nice thing about investing in stocks is that, over time, equities are going to do well," Buffett tells USA TODAY. "American business is going to do well. America is going to do well. So you have the tide with you."

Building wealth in stocks is still the way to go, even though the ride can get bumpy from time to time, Buffett, 83, says.

But to really profit from stocks and build wealth over time, says Buffett,

===> individual investors must Avoid Making COSTLY Mistakes that shrink their portfolio balances,


just as a football team that wants to boost their odds of winning must avoid fumbling the ball away, throwing an interception or taking a penalty at a bad time.


"Don't beat yourself," the Oracle of Omaha says. "Beating yourself is half the problem."

USA TODAY asked Buffett to put on his personal finance hat and to tick off the three biggest mistakes amateur investors make. Here's Buffett's "Top 3 Mistakes to Avoid":

1. Trying to time the market. "People that think they can predict the short-term movement of the stock market — or listen to other people who talk about (timing the market) — they are making a big mistake," says Buffett.

2. Trying to mimic high-frequency traders. Buying stock in a good business and hanging on for the long term, he says, is a better strategy than flipping stocks like a short-order cook flips pancakes.

"If they are trading actively, they are making a big mistake," Buffett says.

3. Paying too much in fees and expenses. There's no reason to pay an expensive management fee to invest in a mutual fund when super-low-cost index funds that mimic large indexes like the Standard & Poor's 500-stock index are available, he says.

"If they are incurring large expenses in connection with their investing," says Buffett, "they are making a big mistake."

Buffett, of course, is famous for buying stocks when they are cheap, buying solid businesses that make a lot of money today and will make a lot of money tomorrow, and hanging on to his investments for a long time to better maximize profit potential.

The strategy works. You don't become the richest person in America during your career with a lousy investment game plan. (Buffett, with a net worth of $58.5 billion, is currently ranked No. 2 behind Microsoft founder Bill Gates, who's worth $72 billion, according to Forbes magazine.)

"Doing reasonably well investing in stocks," Buffett says, "is very, very easy."

Here's how he says investors should play the investing game:

"Buy an index fund, preferably over time, so you end up owing good businesses at a reasonable average price," says Buffett. "And that is all you have to do."

That's it? It's that simple? Buffett says yes.

"You don't need to look at the prices of the stocks you own from week-to-week, or month-to-month, or even year-to-year," says Buffett.

 "If you own a cross-section of American businesses,
===> and you DON't Get Excited (and Buy) just at the very top,

====> and if you Buy in over time,

you are going to Do Well."

www.usatoday.com/story/money/personalfinance/2013/10/26/warren-buffett-investment-advice/3188499/

Warren Buffett advocated the virtue of saving (PAY Yourself FIRST):
Some pictorial additions to Investment Moats illustration.   


Get Rich: How to Pay Yourself First

AUGUST 19, 2012 BY DRIZZT

The key to sustainable wealth building is not just to put savings above all else, Pay YOURSELF First, built psychological mechanisms based around habits and goals to ensure a stream of cash flow for you to build your wealth.


www.investmentmoats.com/budgeting/get-rich-how-to-pay-yourself-first/