Always worth looking at an investment through the eye's of one of the greatest Investors of all times and comparing his philosophies with your own investments.
The Market Can Price Things Wrong
“Price is what you pay. Value is what you get.”
In other words, don’t focus on short-term swings in price, focus on the underlying value of your investment. WBTWBTWBT
“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” From a man who has made a fortune on companies like Apple, American Express, General Motors, UPS, Johnson & Johnson, Mastercard, and Walmart, this is sage advice.High Returns With Low Risk is the Key“Risk comes from not knowing what you are doing.”The advice here is obvious but often forgotten, particularly after investors have had some success. The temptation to believe that success in one area you know well allows you to easily analyze another is much greater once you’ve had some good returns, but should be resisted with vigor. Buffett himself has kept out of the technology sector for the most part, given his lack of knowledge of the sector. Buffett said it best:“Never invest in a business you cannot understand.”It’s Easier to Look Back Than to Look Into the Future“In the business world, the rearview mirror is always clearer than the windshield. WBT
”Buy Wonderful Companies“ It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”This famous Buffett quote is very interesting, as frequently, “value investors” will pass on anything that they cannot get for a deeply discounted price. Berkshire Hathaway has taken a different approach and instead focused on investing in the right companies. This was one of Buffett’s early lessons as a value investor, famously told as his turn away from “cigar-butt investing.”“If a business does well, the stock eventually follows. WBTWBTWBT
”Invest for the Long Term“ Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” Patience is Key“The stock market is designed to transfer money from the active to the patient.”Don’t be impatient when it comes to your money…Make Long-Term Investments Over Short Term Ones“If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”Investing is not trading and has a vastly different goal, like trading, when done well, is about taking measured risks for discrete periods of time at sufficient volume as to generate profits, and typically involves wild swings in profitability. Investing is about minimizing risk to generate wealth over the long term, not generating short-term profits.If Warren Buffett had to choose how long to own a company for, it would be this:“Our favorite holding period is forever.”WBTWBTWBT
“An investor should act as though he had a lifetime decision card with just twenty punches on it.” This quote is basically saying that you should never buy businesses with the intention of selling them. If you could only buy 10 or 20 stocks in your entire life you’d probably be a lot more careful with where you invest. You’d spend more time looking at the company, and you’d make sure you really love it.Only Invest In Wonderful Companies WBTWBTWBTWBT
“Time is the friend of the wonderful company, the enemy of the mediocre.” WBT
”Great Investors Don’t Diversify“ Diversification is protection against ignorance. It makes little sense if you know what you are doing.”“Wide diversification is only required when investors do not understand what they are doing. WBT
”Seize Great Opportunities and Load Up the Truck“ Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble. WBT
WBT Price at posting:
79.0¢ Sentiment: Buy Disclosure: Held
WBT
(20min delay)