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Investing like Warren Buffet

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General Patton
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Investing like Warren Buffet  Reply with quote  

I was wondering if I could get some of your thoughts and opinions on focus investing that Warren Buffet uses. I'm 16 years old and new to investing, so I don't know much about it yet as a whole. I am interested in Buffet because he is one of the few billionaires who has made his fortune solely off of investing.

But basically: You buy a business that is underpriced because of a flawed market, and you hold onto it. You judge the business's worth off of management, price to earnings, and a few other factors that I am forgetting. Try not to deal in commodities, instead go for something with a competition moat. Hold for long term, generally at least 5 years. Ignore the daily market.

One thing I noticed is that Buffet's strategy seems alot simpler than the others I have looked at. It looks at a single business rather than looking at the entire market. Rather than going with or against a trend, it completely ignores it.

Also, how do you personally think a business should be judged to have 'worth' to be invested in?
Post Wed Jul 27, 2005 1:41 am
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David Briggs
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On Buffet: http://lee.org/poly/buffet.html

A business should be judged on its earnings engine, operating costs, and compeitive ranking View profit as contribution to net assets. Judge contribution to net assets on the basis of positive cash flow, cash on hand, and rising stockholder's equity.

Warren Buffet is the icon of value investing, emphasizing balance sheet beauty and untapped brand name appeal. What Buffet has managed to achieve with his focused investment style is (1) a cost basis, (2) measure of diversification and (3) long-term horizion which has greatly assured his chance of favorable outcomes.

~~David
Post Wed Jul 27, 2005 3:35 am
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rvirzi
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Re: Investing like Warren Buffet  Reply with quote  

Sounds like you have Buffet's strategy right, although he would say his holding period is more like forever than just 5 years. You have to have money that you can put away for a long time. But the real talent is in picking the companies. WB always makes sure he knows the company very well and understands how it makes money and why it is undervalued.

Of course, you can always just track what he buys and buy it yourself Razz


[quote="General Patton"]I was wondering if I could get some of your thoughts and opinions on focus investing that Warren Buffet uses. I'm 16 years old and new to investing, so I don't know much about it yet as a whole. I am interested in Buffet because he is one of the few billionaires who has made his fortune solely off of investing.
Post Thu Jul 28, 2005 8:49 pm
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