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Warren Buffett was a student of Benjamin Graham when he went to graduate school in Columbia University and came to be know as the Oracle of Omaha.The world has come to know him as a plain-spoken, avuncular figure more at home at a Dairy Queen in his hometown of Omaha than in a boardroom in midtown Manhattan.
the mystique of Buffett is that this small-town stock picker managed to become America’s second-wealthiest man largely by keeping things simple and sticking to his knitting. That's not all, Buffett has never been afraid to deviate from the classic definition of value investing. This man who downs five Cherry Cokes a day seems at ease investing in Coca-Cola (Buffett’s Berkshire Hathaway owns $9.7 billion in Coke stock).
Buffett’s approach to picking stocks—and businesses to buy outright—is “buy ‘em at a big discount” While Graham Graham never cared much about the quality of the stocks he invested in as long as they were trading at a deep discount to their “intrinsic” value. For his part, Buffett is much more concerned about the quality of the companies he searches for in Wall Street’s bargain-basement bin.
It’s an oft-quoted Buffettism: “The first rule of investing is don’t lose money; the second rule is don’t forget Rule No. 1.”
Don’t get fooled by earnings. Buffett has noted that “most companies define ‘record’ earnings as a new high in earnings per share.” But he says the fact that earnings per share are rising in itself tells you little, because it does not take into account how much shareholders have invested. The more that shareholders invest in a company, the greater its earnings should be. hat’s why Buffett favors a different measure of profitability—return on equity. ROE is calculated by taking a company’s net income and dividing it by shareholders’ equity. Since ROE measures profits as a percentage of what investors actually own, it reveals how efficiently a company’s profits are growing.
While Graham was always reluctant to predict the health of a business, Buffett makes a conscious attempt to identify companies with a good chance of continuing their success 25 years into the future.
Buffett always talks about favoring companies with wide “economic moats.” This doesn’t necessarily mean that a company has to have a lock on a product or a market.
A quick recap on how to invest like Buffet is to find stock selling low than their intrinsic value, not use earnings as the only basis in choosing a stock and pick stock with wide "moat."
For more on stock trading, check out Digital Nomad Here
Warren Buffett was a student of Benjamin Graham when he went to graduate school in Columbia University and came to be know as the Oracle of Omaha.The world has come to know him as a plain-spoken, avuncular figure more at home at a Dairy Queen in his hometown of Omaha than in a boardroom in midtown Manhattan.
the mystique of Buffett is that this small-town stock picker managed to become America’s second-wealthiest man largely by keeping things simple and sticking to his knitting. That's not all, Buffett has never been afraid to deviate from the classic definition of value investing. This man who downs five Cherry Cokes a day seems at ease investing in Coca-Cola (Buffett’s Berkshire Hathaway owns $9.7 billion in Coke stock).
Buffett’s approach to picking stocks—and businesses to buy outright—is “buy ‘em at a big discount” While Graham Graham never cared much about the quality of the stocks he invested in as long as they were trading at a deep discount to their “intrinsic” value. For his part, Buffett is much more concerned about the quality of the companies he searches for in Wall Street’s bargain-basement bin.
It’s an oft-quoted Buffettism: “The first rule of investing is don’t lose money; the second rule is don’t forget Rule No. 1.”
Don’t get fooled by earnings. Buffett has noted that “most companies define ‘record’ earnings as a new high in earnings per share.” But he says the fact that earnings per share are rising in itself tells you little, because it does not take into account how much shareholders have invested. The more that shareholders invest in a company, the greater its earnings should be. hat’s why Buffett favors a different measure of profitability—return on equity. ROE is calculated by taking a company’s net income and dividing it by shareholders’ equity. Since ROE measures profits as a percentage of what investors actually own, it reveals how efficiently a company’s profits are growing.
While Graham was always reluctant to predict the health of a business, Buffett makes a conscious attempt to identify companies with a good chance of continuing their success 25 years into the future.
Buffett always talks about favoring companies with wide “economic moats.” This doesn’t necessarily mean that a company has to have a lock on a product or a market.
A quick recap on how to invest like Buffet is to find stock selling low than their intrinsic value, not use earnings as the only basis in choosing a stock and pick stock with wide "moat."
For more on stock trading, check out Digital Nomad Here
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