Of course there are reams of paper filled with analysing how the 'oracle of Omaha' made (and still makes) his money.
Decluttering a few such analyses here:-
1. Warren Buffett follows a strictly conservative investment philosophy and is a staunch proponent of the buy-and-hold strategy.
2. As he says, his favourite holding period is ‘forever’.
3. He prefers to invest in straightforward businesses, which manufacture products that people can’t or don’t want to live without.
4. There is no place for hype in his scheme of things and companies that boast speculation are often disregarded.
5. His primary concerns include the financial stability, quality of management and simplicity of business.
6. He also checks whether the company has the ability to pass on any rise in its costs to its consumers, and to adjust the prices of its products to inflation because this enables it to make profits in varying economic climates.
7. To identify solid companies that are worth investing in, Buffett uses a series of fundamental indicators, such as stability of earnings, level of long-term debt to earnings, return on equity (ROE), return on total capital (ROTC), free cash flows, and return on retained earnings.
8. One of Buffett’s abiding principles is that stock price volatility, even year-to-year fluctuations, are caused by irrational investor behaviour that can’t be predicted.
9. Therefore, he is concerned more with the percentage change in per share book value instead of the stock price.
10. It is also critical that a company should have an ‘enduring moat’, its USP that makes it almost impossible for its competitors to overtake it regardless of how much effort they put in.
11. Soft drink giant Coca-Cola, a long-term holding in Buffett’s portfolio, is a good example of an enduring moat, with its brand equity being so formidable that no matter how many its rivals spend on advertising and marketing, Coca-Cola’s market leadership will not be affected.
12. Another key aspect that Buffett looks at is a company’s market position, and likes the firms that enjoy ‘consumer monopolies’ due to an overwhelmingly dominant market share, which gives them the power and leverage in the marketplace.
13. It may sound counter-intuitive, but Buffett is not into diversification, and concentrates his investments in a few well-chosen stocks.
14. Such a strategy would normally be considered risky, but not in his case, because he analyses the stocks threadbare, waits until the price is low, and holds for long periods.
15. Day-today market movements don’t bother him too much.
16. Therefore, his strategy will suit investors who want to stay invested for a "very" long term.
As his famous quote goes:
“BUY WITH GREAT CARE, AND HOLD FOR A LONG, LONG TIME.”
Of course there are any number of Priceless Quotes of Warren Buffett on the Net !
Sharing some that are truly influential :-
1. ON EARNING: Never depend on single income. Make investment to create a second source.
2. ON SPENDING: If you buy things you do not need, soon you will have to sell things you need.
3. ON SAVINGS: Do not save what is left after spending, but spend what is left after savings.
4. ON INVESTMENT: Do not put all eggs in one basket.
5. ON TAKING RISK: Never test the depth of the river with both the feet.
6. ON EXPECTATIONS: Honesty is a very expensive gift. Do not expect it from cheap people.
7. AND THIS QUOTE TAKES THE CAKE:
Past is a waste paper.
Present is a newspaper and
Future is a question paper.
Come out of your Past, control the Present and secure the Future.
Decluttering a few such analyses here:-
1. Warren Buffett follows a strictly conservative investment philosophy and is a staunch proponent of the buy-and-hold strategy.
2. As he says, his favourite holding period is ‘forever’.
3. He prefers to invest in straightforward businesses, which manufacture products that people can’t or don’t want to live without.
4. There is no place for hype in his scheme of things and companies that boast speculation are often disregarded.
5. His primary concerns include the financial stability, quality of management and simplicity of business.
6. He also checks whether the company has the ability to pass on any rise in its costs to its consumers, and to adjust the prices of its products to inflation because this enables it to make profits in varying economic climates.
7. To identify solid companies that are worth investing in, Buffett uses a series of fundamental indicators, such as stability of earnings, level of long-term debt to earnings, return on equity (ROE), return on total capital (ROTC), free cash flows, and return on retained earnings.
8. One of Buffett’s abiding principles is that stock price volatility, even year-to-year fluctuations, are caused by irrational investor behaviour that can’t be predicted.
9. Therefore, he is concerned more with the percentage change in per share book value instead of the stock price.
10. It is also critical that a company should have an ‘enduring moat’, its USP that makes it almost impossible for its competitors to overtake it regardless of how much effort they put in.
11. Soft drink giant Coca-Cola, a long-term holding in Buffett’s portfolio, is a good example of an enduring moat, with its brand equity being so formidable that no matter how many its rivals spend on advertising and marketing, Coca-Cola’s market leadership will not be affected.
12. Another key aspect that Buffett looks at is a company’s market position, and likes the firms that enjoy ‘consumer monopolies’ due to an overwhelmingly dominant market share, which gives them the power and leverage in the marketplace.
13. It may sound counter-intuitive, but Buffett is not into diversification, and concentrates his investments in a few well-chosen stocks.
14. Such a strategy would normally be considered risky, but not in his case, because he analyses the stocks threadbare, waits until the price is low, and holds for long periods.
15. Day-today market movements don’t bother him too much.
16. Therefore, his strategy will suit investors who want to stay invested for a "very" long term.
As his famous quote goes:
“BUY WITH GREAT CARE, AND HOLD FOR A LONG, LONG TIME.”
Of course there are any number of Priceless Quotes of Warren Buffett on the Net !
Sharing some that are truly influential :-
1. ON EARNING: Never depend on single income. Make investment to create a second source.
2. ON SPENDING: If you buy things you do not need, soon you will have to sell things you need.
3. ON SAVINGS: Do not save what is left after spending, but spend what is left after savings.
4. ON INVESTMENT: Do not put all eggs in one basket.
5. ON TAKING RISK: Never test the depth of the river with both the feet.
6. ON EXPECTATIONS: Honesty is a very expensive gift. Do not expect it from cheap people.
7. AND THIS QUOTE TAKES THE CAKE:
Past is a waste paper.
Present is a newspaper and
Future is a question paper.
Come out of your Past, control the Present and secure the Future.