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By Nitin Gupta

World’s most successful investor Mr. Warren Buffet has unique way of investing. He says investing is very simple. It is not a rocket science. His techniques are very simple but very difficult to follow. His holding period is forever. He loves to look at market when nobody looks there. He writes annual letters to employees and investors of his company. Let’s take look some of its sayings which give glimpse of his style of investing.
  1. “Someone’s sitting in the shade today because someone planted a tree a long time ago”. - It clearly means that if we want to make our tomorrow better then start working today for it. Early investing bear more fruits as it provides compounding effects. It matters lot in long run.

  2. “In the business world, the rear view mirror is always clearer than the windshield”. - Mr. Buffet is pointing that past performance of company shows that how it had performed. It gives clear picture of company’s past profitability during economic/industry slowdown or cyclic time. It shows that how company will perform in future. He screens stock based on past performance of company to highlight the future earnings.

  3. “Buy a business, don’t rent stocks”. – It means don’t just keep buying and selling the stocks. Buy it for long term. While investing in particular stock of a company thinks, will you purchase whole company if you have money?

  4. “Buy companies with strong histories of profitability & with a dominant business franchise”. – Mr. Buffet has his own style of investment. He chooses to invest in those companies which are leader of industry. He finds these companies can pass price escalation to customers very easily which makes them profitable.

  5. “Our favorite holding period is forever”. – It says that purchase a stock for longer term and this term ends when you will exit the investment world. It shows buy a stock and forget it.

  6. “Be fearful when others are greedy and be greedy when others are fearful”. – It is as difficult to practice as easy to say. Mr. Buffet says that when market is blood bathed and everyone is crying for market fall that is the only time to purchase stocks. One fundamental reason of doing so is we get good companies at cheap valuations. When market recovers these good companies will be leader of market run.

  7. “A great investment opportunity occurs when a marvelous encounters a onetime huge, but solvable problem”. – it means strong professional and market leader companies don’t provide opportunity to enter in the stock. Suddenly these companies cracked due to some mess which is temporary in nature. This led to huge price correction. This is time to accumulate such stocks. Consider Maruti Suzuki for its problem with trade union and stock was trading that time Rs. 1000-/- odd level. Long term investor collected the stock at very cheap valuation to its instinct value.

  8. “If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays”. – Mr. Buffet writes annual letters to its employees and investors of Berkshire Hathaway where he discuss his investing techniques and give guidance to ………... His recent letter to his company on 01 Mar 01 says “If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays”. There is wide misconception among investors who says that they try to follow Warren Buffet way of investment style but they can’t resist themselves from watching daily price fluctuations. Investment guru points out that if can enjoy market holidays without looking at screen then you can enjoy weekdays too.

  9. “I am better investor because I am businessman & better businessman because I am investor”. – There is difference between speculator and investor. Speculator is a person who doesn’t bother about loss or gain. He is a person of very short term horizon and move on with whatever the result. Businessman is a person who starts his venture with very long term view and has “Going On Concern” concept in mind. Having loss in business don’t force him to shut it down. He believes it turning in around and make profitable. This concept is rightly applicable to investors. Therefore, he says that better businessman is also best investor.

  10. “The investor of today is not profit from yesterday’s growth” – World’s most successful investor points out that you need to invest in growing companies with very long term view. Tomorrow, when these companies have grown enough up you need to sell investments and find new growing companies. Yesterday’s growing company who have expanded it operation in full scale may not yield better returns in longer terms. For more news on the stock market click here.

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