Warren Buffet- tips from the worlds best investor.

A good summary of some tips from Warren Buffet on another forum i thought it was worth placing on hotcopper ( poster was Pedro on Egoli).


1.The future is never clear you pay a very high price for cheerful consensus

2. Be fearful when others are greedy. Be greedy when others are fearful

3. The most common cause of low prices is pessimism sometimes pervasive sometimes specific to a company orindustry Do business not because we like pessimism but we like the prices it produces

4. He considers the stock market does not exist
it is there as a reference to see if anybody is offering to do something foolish

5. Best returns are from companies producing the same product or service for a number of years undergoing major changes increases the liklihood of committing major errors He learned not to solve business problems but to avoid them

7. Has anyone done anything foolish lately that will allow me an opportunity to buy a good business at a great price

8. An investment is one which upon thorough analysis promises safety of principal and a satisfactory return

9. When people are greedy or scared they will often buy or sell at foolish prices



Most stocks i trade conform to his principles witha couple of exceptions. I also think smaller new companies with high growth have the potential for big returns ( with risk) which classic Buffet wouldnt touch. (Adult Shop (ASC) for example).

One of my holdings which i think conforms to classic Buffet is HVN ( Harvey Norman) which i got into recently. Stable formula, proven high growth, solid earnings, becoming a bit of a category killer in many areas leading to market dominance. Sold down to $3.00 recently for no good reason, against the trend and consolidated there.

I also think the announcement about the success of its rebel sport subsidery has been overlooked. As another poster mentioned, it proves that the Harvey Norman growth strategy can be applied to other markets allowing for much greater expansion, now that the Australian electrical side has been almost sewn up with Harvey Norman.

Applying a Buffet strategy, combined with charting, leads me to be pretty confident with HVN at $3.00