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What investment strategies made Warren Buffett the best investor of the 21st century? On his 90th Birthday (30th Aug) we break down those strategies. He is a true believer in Long Term Value Investing.
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Berkshire Hathaway, The company of Warren Buffett owns:
The Company wholly owns many companies and has the following stakes in these world-renowned organizations:
|Bank of America||11.5%|
Berkshire Hathaway stock price
Investors have never been happier.
|$1 invested in 1964 in:||Value Today|
What investment strategies Warren Buffett adopted?
Buffett doesn’t invest in stocks if he can’t assess the future potential.
There are no social media or cryptocurrency companies in his portfolio.
Strong Focus on companies that are currently undervalued but have competitive advantage
He believes in LONG TERM VALUE INVESTING. This means purchasing stocks at a price below their intrinsic value; then holding them until their price reflects the real value of the company.
Buffett prefers a company which distributes profits among shareholders as dividends instead of reinvesting back in business
His point of view- It shows company believes in maximizing shareholder value.
Sell at the right time
Many Buffett followers believe that “Buy and Hold” is his only strategy.
Buffett has rules and he diligently follows them. When a company no longer fits his criteria, he sells.
Finally, Buffett does not just buy an undervalued company and sit back peacefully in Omaha to count his gains.
He believes not only in investing rather owning and running the company.
He buys enough shares to be on board so that he can guide the company’s direction & hiring the right management.
Warren Buffett has been a follower of Benjamin Graham and his best selling book “The Intelligent Investor”.
In the book, Graham details his philosophy of “value investing,” or buying stocks when they are undervalued and holding them for a long period of time- A typical Buffett strategy now.
Some Important quotes that say a lot about Warren Buffet’s Investment Strategy
You should invest in a business that even a fool can run because someday a fool will.
This is the cornerstone of our investment philosophy: Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.
Fun Facts about Warren Buffett
Buffett applied to Harvard Business School. But he was rejected. He was told: “Forget it. You’re not going to Harvard.”
After much disappointment from the rejection, Buffett discovered that his idols Benjamin Graham and David Dodd were professors at Columbia Business School.
I wrote them a letter in mid-August,” Buffett shares, “I said, ‘Dear Professor Dodd. I thought you guys were dead, but now that I found out that you’re alive and teaching at Columbia, I would really like to come.’ And he admitted me.
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