Most of everyone participate in the stock market are inspired by Warren Buffet, the iconic character in the investment field who is considered as the most successful investor in the 20th century. The CEO of Berkshire Hathaway consistently ranked among the top richest man on earth. As an amateur investor who spent sometimes on the stock market, trying to make abnormal returns, I was really eager to know about skills and method applied by Buffet to get billion dollars from the market.
Buffet and his partners Charlie Munger always follow some fundamental rules in any investment. First, only making the investment in the business that you understand. If you follow the trend and pouring the money into the field that you have no experience and knowledge, you earned for yourself a very high possibility of failure. Secondly, business with intrinsic value will more likely to obtain the durable competitive advantage. To estimate the core value of a business, however, is not an easy task which requires considerable efforts on research and investigate. Thirdly, the management team should be associated with two important key values which are “integrity” and “talent”. Without talent, it will be difficulty for the team to achieve any outstanding result. Without integrity, the team can be considered as useless as at the end of the day their greedy will destroy everything. Lastly, only accept the price that is reasonable. The investor has to have his/her own senses on the price and should never go for the overvalued assets. It has to be noted that successful investors are the ones who are good at maintaining the calm attitude and follow their own rules and principles.
I also cannot agree more with the suggestion made by Evan Davis about choosing the life style of Buffet notwithstanding you can become as rich as him or not. In fact, Buffet choose the humble living style with regular standard. He also appears as being very famous for his philanthropy and generosity. As learnt from Buffett’s ‘Personal Value System’, I believed that the true value of each person can be seen by looking at the moral and ethical principles they follow.
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