Warren Buffett's Investment Philosophy
Warren Buffett is considered one of the best investors in history. He is also known for his philanthropic work. He is the chairman and CEO of Berkshire Hathaway, which owns companies such as insurer Geico and battery maker Duracell. He also has pledged to donate 99% of his wealth to the Bill and Melinda Gates Foundation.
Simple and Straightforward Approach
Buffett's investment philosophy is simple and straightforward. He tries to buy companies that are undervalued by the market and hold them for the long term. He focuses on fundamentals such as earnings and dividends rather than short-term price movements.
Hidden Profit and Conservative Borrowing
He believes that accounting reports are not revealing enough about companies' economic performance and that there is often hidden profit in business shares, which are not reflected in the financial results. Consequently, he avoids using debt and only borrows when interest rates are favorable and in the long run.
Building Up Diversified and Profitable Businesses
When he buys companies, he aims to build up whole, diversified businesses that are profitable. This is a strategy that has made Berkshire Hathaway successful.
Investing in Companies with Competitive Advantage
In addition, Buffett invests in businesses with a durable competitive advantage and that offer stable dividends. He also considers the company's balance sheet, which reflects its stock value and book value.
Controlling the Cost of Production and Improving Profitability
As a rule, he also looks for companies that are able to generate profits through their own operations. This strategy allows him to control the cost of production and improve profitability.
Warren Buffett: The Oracle of Omaha
While he is a great investor, he is also a human being with emotions and beliefs that are sometimes at odds with his investing decisions. This film is an entertaining look at a man who has been dubbed the Oracle of Omaha and has become a billionaire in the process.
A Private Man with Valuable Insights
Despite his fame, Buffett is an extremely private man and does not share his personal details publicly. He does, however, write regular letters to Berkshire shareholders that give a behind the scenes view of his investments and company's management.
The Must-Read Letters
These letters are organized by theme and are a must-read for anyone interested in investing or if you just want to learn more about Buffett's approach. The essays are very readable and provide an in-depth analysis of some of the most significant investment decisions Buffett has made throughout his career.
Lessons from Warren Buffett
A few of the lessons he offers are useful for both investors and non-investors alike: It is important to take care of your brain and body, be patient and don't let your mind get swayed by emotion.
Patient and Minimalist Lifestyle
He's also a bit of a minimalist, not carrying a cell phone or computer and having only one email account. He grew up in Omaha and wants to stay there, so it's not surprising that he focuses on local relationships and has a limited social life.
Aiming for Long-Term Fortune
He is also an extremely patient man who has never gotten bored, and he takes his time when deciding which investments to make. He aims to build his fortune over many years and is willing to wait for the right opportunity, even when the odds seem stacked against him.
