Unveiling the wisdom of the Oracle of Omaha, we delve into the top five investing insights from Warren Buffett. These pearls of wisdom, distilled from decades of successful investing, offer invaluable guidance for both novice and seasoned investors alike.
When it comes to investing for wealth creation, many of us look for inspiration in the quotes of Warren Buffett.
Buffett is the ninth-richest man on the planet with an estimated net worth of US$103.8 billion
- Since 1970, he has been the Chairman and the largest shareholder of Berkshire Hathaway
- He lives by a certain set of rules and values to make decisions in life and in investing
- Never lose money
- When you go wrong, limit losses and get out of the position as soon as possible
Don’t try to predict the future, prepare for it
‘Predicting rains doesn’t count, building arks does’
Fluctuations are part of the market
Use these fluctuations to create long-term wealth
- Warren Buffett recommends ‘building arcs’
- Buy stocks of companies with strong business and good fundamentals
- Be a businessman and buy shares only if you believe the company has the right combination of finances, management, products, and competitive edge to succeed in the future
Price and value aren’t the same: Don’t pay too much
Price is what you pay, value comes from what you get
- Value investors consider a stock to be undervalued when it’s trading at a price less than its intrinsic value
- When a stock is trading higher than its inherent value, it is overvalued
- Margin of Safety
- The margin of safety is the difference between a stock price and its intrinsic worth, or value
Invest in companies you believe in
The greatest danger comes from buying at the wrong time, or from buying stocks that ought not be bought at all.
- To avoid losing money, only invest in companies with a history of smaller losses and a solid operating earnings and bright growth outlook for future.
