Warren Buffett has made a lot of money over the decades by Investing in the stock markets. Now, learn why buffett is better at investing than you? Here are some words of wisdom from Warren Buffett who is also one of the best teachers of investing.
Invests in Yourself First
The best investment you can make is in your own abilities. Anything you can do to develop your own abilities or business is likely to be more productive.
Warren Buffett says that the best investment one can make is on his/her own abilities. Most people are not going to make most of their money from the stock market. They’re going to make it from their careers. So put yourself first. Buffett’s partner Charlie Munger had a similar thought. Munger’s secret to success: sell yourself an hour each day, and use that hour to make yourself better.
Never Stop Learning on Qreoo to Invest in yourself first.
Never Lose Capital
Rule No. 1: Never lose money.
Rule No. 2: Never forget Rule No. 1.
If we can eliminate loss of capital, and the permanent destruction of all the future compounding value of that lost capital, then the odds of healthy long-term returns from investing are in our favor. Yes, losing isn’t enjoyable, however when you lose it’s a feedback mechanism telling you that something is wrong and needs to be worked out.
Read more on Montley Fool to understand what Buffett means when he says never loose money.
He Started Investing Early
Someone’s sitting in the shade today because someone planted a tree a long time ago.
Warren Buffett purchased his first stock when he was 11 years old. Yet, he jokes he did not start early enough. The best time to invest is several years ago. The second-best time is now. The sooner you get in the better. Don’t wait to invest. Invest and wait.
Read more on The Balance to see the chronological history of Warren Buffett.
He Is in It for The Long Term
Our favorite holding period is forever.
Buffett says only buy something that you’d be perfectly happy to hold if the market shut down for 10 years. His philosophy on investing is that in the long term, investments will give back returns that could compound many folds than the initial investment over the years. Stocks let investors live off dividends while also nabbing stock appreciation for future. Therefore, always invest for the long term.
Warren Buffett Prefers Simplicity
Never invest in a business you can’t understand.
You don’t have to be an investing guru or know everything about finance to be a successful investor. To be a successful investor Warren Buffett hasn’t needed any more maths than plain old addition, subtraction, multiplication and division. He funnily adds that “If calculus or algebra were required to be a great investor, I’d have to go back to delivering newspapers.”
He Reads Balance Sheets
In the business world, the rearview mirror is always clearer than the windshield.
How many of us, when weighing up a potential investment, make the “Principal risks and uncertainties” section of the company’s annual report or the balance sheet and cash flow statement?
Buffett’s approach to investing suggests we would be well-advised to do so. When asked why other investors can’t be as successful as him, he simply replied he spends more time reading the balance sheets while others don’t. By reading the balance sheets one can understand the earnings growth, dividend yields, potential massive market opportunity and so forth of his investment. You can easily learn to read balance sheets by record keeping your own investments like a investor report.
He Uses the Talent of Others
It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.
Our talents are purposely limited. We can benefit from talents of other people’s as well. As humans we have only finite energy and talent. By seeking the use of others talents and knowledge will help you in achieving your goal more easily and quickly through the combined effort. Buffett has stayed true to his words by using the talents of wise people in running his company Berkshire Hathaway with talents like Ajit Jain and Gregory Abel. Through constant use of others talents and strengths your investments can lead to faster growth and development.
Warren Buffett’s investments haven’t always been successful or any other investors for that matter, but they were well thought-out and followed value principles. By keeping an eye out for new opportunities and sticking to a consistent strategy you too can make better investments.
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