Warren Buffet is the undisputed king of investing and in his many years of investing, he has dropped many nuggets of investing wisdom aptly named "Buffet-isms"
We countdown the top 10 "Buffet-isms" every investor needs to know in order to make bucketloads of money just like the man himself.
#10. You don't have to be a genius to invest well
What Buffet means is that sometimes smart people with high IQs make bad decisions in the stock market.
They think they can out-think the core principles, and very often they are proven wrong.
Better a guy with a 130 IQ that follows the principles than a Rambo investor with a 160 IQ.
#9. Master the basics
Too much "theory" can cramp the brain, Buffet says.
What you need to know is simply how to VALUE a business, and how to think about market prices.
Everything else is fluff. Too much and you'll suffer financial diabetes.
#8. Don't buy just because everyone likes it … or hates it
Most people have a herd mindset. They buy because everyone else buys.
Buffet says that's foolish. Then there are those who buy what everyone hates.
That's not always clever too. Buffet explains its always smarter to look at the REAL numbers than to decide based on public emotion.
#7. Always be liquid
Buffet says it best …
"Berkshire will always have more than ample cash, because we never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."
Wise words.
#6. The best time to buy a company is when its in trouble
Buffet says the best time to buy a company is when they are great but in temporary trouble.
Strike when the iron is hot, because this window is not open forever.
#5. Think Long Term
Buffet says that investors should buy at a good price a business that can deliver earnings higher five, ten and twenty years from now.
Few companies meet these standards, so when you find one, buy a good amount of their stock.
Don't stray from this guideline, because if you aren't willing to own it for ten years, don't own it for ten minutes.
#4. Don't over-stay your welcome
The line between investing and speculation is sometimes blurred, especially when market players make some money – Buffet writes.
During those times, market players know they should take their earnings and leave, but their greed forces them to overplay their hand and outstay their welcome.
This is how people end up losing what they've earned and more.
#3. Forever is a good holding period
Buffet's long-term philosophy is very real as he writes to shareholders – "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."
#2. Buy businesses that can be run by idiots
One of Buffet's favorite sayings is "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.ì
#1. Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1?
And the number one Warren Buffet rule is simply DO NOT EVER LOSE MONEY.
Follow these Buffet-isms and you too might be on the road to emulating the great man's financial success.
Two people that can help you on your investing journey are local value investing heroes, Sean and Cayden.
Sean and Cayden have studied value investing long and hard, and they have recently put together a course that teaches beginner investors how to make money using proven value investing techniques.
Their course is so good its recommended by Mary Buffet, the daughter-in-law of Warren Buffet … and the only female who has watched the man himself in action for years.
Mary Buffet states – "I'm really impressed with your program. You teach people how to make their money work for them and your program is very important."
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