This is awesome advice. The first one is the biggest. There are very very smart people who are investing, and they are the enemy. If you enemy is doing more homework than you, than you are going to lose to them. If you want to gamble, go to vegas... the odds are better for you. If you want to just put money on the table and go for the longshot horse, then go to the track.
They are definitely legit bits of advice in a homespun kind of way. They are decent mantras to live from. That said, Buffett's ability to make money is based on more than just using these techniques. He has access to forms of leverage that the average man on the street isn't able to, allowing him to make out-sized returns as a result. He also has an incredibly sophisticated team behind him as well to implement his philosophy. In other words, it's very difficult to replicate his approach to making money.
Buffett was a follower of Benjamin Graham. Graham wrote "The Intelligent Investor" and "Security Analysis". I've read both, and strongly recommend them. Some of the best lessons we can learn from them are to buy good companies on the cheap, hold them until they are no longer cheap, not over-complicate things, be patient, manage risk, and to try to reasonably minimize expenses. Most of the guys who turn investing into rocket science, turn their portfolios over constantly day in and day out, borrow large amounts & take on enormous risk, waste huge amounts of $ in transaction costs, realized losses, STCG taxes, etc aren't in business very long.
Buffet's advice is pretty much common sense really, although sometimes we do need the obvious pointing out to us. He may have bought his first stocks at the age of 5 but chances are, they were bought for him by a parent or relative. Because someone had the foresight to do this, he ended up with enough money to make more substantial investments and grow his fortune. So I do think there's been a little bit of luck along the way and it's true that he has connections which Average Joe couldn't even dream of.
Wonderful golden nuggets right there investor...maybe that's why i'm holding off investing for now, i really want to be ready all-wise, mentally, physically...e.t.c....go in with a sober mind and a can-do attitude and with a wad of cash of course ...i believe the results will be amazing then.
this is absolutely true. I once started investing on penny stocks and it really trained me in some ways. Emotion is really a big factor because you are always torn between... "afraid of losing money" and "greed that there's more to come". Really, patience is a virtue. Setting reasonable expectations will help you a lot. Also, you really have to READ A LOT. from what the investors are saying, relevant books and NEWS PAPERS!
I have found that simply taking the time to read up on companies and making sound decisions based upon what you learn will pay off bigtime in the long run.
Warren Buffet really has this great wisdom when it comes too investing. That's why I trust his ideas because he has been in business for so long so he has the first hand when it comes to experiences. He does have a point when he said to consider more than just the price when buying stocks. The price is big but the returns will also be big because these companies have already developed their name and reputation.
This seems like a solid advice. Once we know what's happening with the companies we will know if it's a good investment or not, not much more about it, we must know what we are investing in.
One of the top tips is not to panic when a trade goes against you as you can't physically expect to buy at the very very bottom.
