Warren Buffett's Secrets To Financial Success
Warren Buffett's Secrets To Financial Success
American financial mogul Warren Buffett has a long history of financial success, from his time at the Wharton School at the University of Pennsylvania to starting Buffett Partnership Ltd in 1956 and acquiring the famed Berkshire-Hathaway textile company, which he's led as Chairman since 1970. Widely regarded as one of the world's foremost financial moguls, let's examine some of the "Oracle of Omaha's" secrets to financial success.
Change Your Investments If They're Failing
One key thing Buffett says is, "Should you find yourself on a sinking ship, your time is better spent finding a new vessel than patching holes". If your investments fail, it's time to change your approach, or sell those stocks and re-purchase better options. Change is the only constant in the market and you should embrace it.
Following The Crowd Isn't Always A Good Idea
Buffett's next piece of advice: "Beware the investment activity that produces applause, great moves are usually greeted by yawns". What he means is that following the crowd on what seems like a good investment could mean that in a few months, you'll be left with very little. Sometimes, it's better to wait for the market to calm and then make your moves.
Invest In Stocks That Have Value
As Buffett says: "Price is what you pay, value is what you get". While the price of your stocks may change depending on which way the wind is blowing, focusing on their overall value (by doing your homework on which stocks hold the most long-term value) is a way to not get caught up in panic-selling based on the price.
Never Invest In A Business You Don't Understand
If you don't understand how a business works, or what the product it sells does, it's not a good idea to put your money into it. You want to ensure you invest in things you understand because that will inform your investment strategies throughout the life of the business.
