Few investors were just as successful on a enormous -scale as billionaire Warren Buffett. Few caught the imagination of other investors in the same way, partly due to the way Buffett freely and clearly divides their investment wisdom.

What are the actions

In this year’s letter to Berkshire Hathaway Shareholders, Buffett, said he thought the actions as “as partial ownership of companies“.

So, while traders look at the actions as numbers or pieces of paper, Buffett considers them to participate in the company. If he did not want to have the whole company, why should he buy even a tiny share?

The fact that shares have a price that can move, distracts the attention of many investors, who finally think about shares only in terms of their price.

Buffetta’s approach consists in perceiving the market as a mechanism of buying or selling shares If so, choose On each commercial day – but without a duty. He said that if the market is closed for years if it doesn’t bother him.

Priceing companies matters

Warns about the misleading price – “what you pay” – with value -“what do you get“.

Warren Buffett believes that a good investment does not have to be made with a budget-friendly valuation. But it should be “at least”attractive“.

I stick to what you know

As Buffett said in this year’s letter: “Each company does not have an easy -to -understand company“That’s why it says that it is critical that investors stick to their own”Circle of Competence“.

This may include the quality assessment of the current management of the company, but it is crucial that it also includes the assessment of the business model and operations.

Why? Buffett says: “I try to invest in companies that are so wonderful that an idiot can run them. Because sooner or later it will be“.

Profits submitted in the long run

The preferred period of maintenance of Buffetta for the action is “forever“Is the personification of a long -term investor.

When he earns on shares in the form of dividends or capital gains, he does not pay them to Berkshire shareholders as dividends. Instead, Berkshire reinvests them.

This straightforward but powerful financial technique (known as elaborate) is also from which a tiny investor can utilize.

From 1965, the market value of Berkshire on Share met 19.9% ​​per year. The long -term approach helps a lot here: the total profit during this period was amazing 5 502 284%!

You don’t have to act, but don’t care

Buffetta quote above on the subject of stock market closure has been shown for years that he can be ecstatic to sit for a long time without doing anything.

But when he finds the opportunity he likes, he tends to act definitely.

Many investors like Apple (NASDAQ: AAPL). The market on which it operates is huge and is probably growing. His mighty brand, reserved technology, characteristic design, popularity and installed user base are assets.

Sticking on his circle of competence, Buffett watched Apple for decades without investing. For the first time he invested less than a decade ago.

He invested in a great way, investing over USD 30 billion in Apple shares. This is the largest Berkshire farm and has made huge profits.

But Apple’s net profits have dropped over the past few years. Factors, including increased tariffs and budget-friendly Asian telephone rivals, are a continuous risk. Warren Buffett significantly reduced its participation in Apple.