Warren Buffett’s 10 Biggest Rules for Investing Success

Posted on November 26, 2018 by in Investing

Warren Buffett is considered one of the greatest investors around the world; the third richest man in the world after Carlos Slim and Bill Gates. A respected man, a reference, an idol in the world of business. Many imitate what he did to try to have a success similar to his.

Some Info about Warren Buffett

His father was a stockbroker, so from very young age, Buffett was already interested in the world of stockbroker; he was always surrounded by media and economy, since he was a newspaper seller.

Buffett had a remarkable ability with mathematics and memorization of numbers that would help him in the future to intelligently analyze the stock market world.

At the age of 12, “The Oracle of Omaha“, known by this name in the present, made his first investment in association with his sister, making a small profit of approximately 9 dollars, but with this investment Warren Buffett had already entered this world.

Today, this multimillionaire man has even achieved President Obama to include part of his rules for tax recollection in United States. He has written several books and has given many of its rules to ensure the success of new investors in the largest extent, a teaching guide.

1. You have to preserve the capital

One of the most famous rules by Warren Buffet says: “Rule No. 1: never lose money. Rule No. 2: never forget rule No. 1”.

Capital is the most important thing to an investor, since it is their last ammo to save their investment and it should be used when a good opportunity is found.

Do not allow the losses to increase and leave you without capital and if it happens, learn how to deal with these losses.

2. Invest long term, somewhat basic but essential

Our favorite holding period is forever”, says Warren Buffett.

The more long-term you invest, the greater the potential effect of cumulative profitability on the original value of their investment.

3. Do not go with the flow

Be fearful when others are greedy and greedy only when others are fearful“.

Unexpected or negative news may have an important effect on the behavior of stock markets.

4. Price is what you pay, value is you get

It is very important for us to be able to tell the difference between these two terms, since the market reactions do not always reflect the valuations of the companies.

With this in mind, we can effectively determine when it is a good time to make a purchase, for example: when the price drops below the value of the firm.

5. It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price

Buffett gives more importance to the quality of the firm, even if it meant paying a price of entry that weren’t necessarily very low.

6. Time in this business is not best friends with many

While large and already established companies usually only benefit from time and grow even more, small companies are damaged and affected by this factor.

It is the enemy of the wonderful company, the enemy of the mediocre, so remember that your investment should win the passage of time. With this in mind, assemble a good strategy.

7. I’ve never swung a ball while it’s still in the pitcher’s glove

The phrase refers to not invest in companies that still have not proven to be successful or those that are barely starting.

8. Never ask a barber if you need a haircut

It is like asking your wife if your girlfriend is pretty.

When you’re going to purchase an action or a new company, never ask the owner if it is good or profitable. Evaluate it yourself; analyze profitability and proceed or not with the purchase.

There is no better eye than yours.

9. Take advantage of what you know, there is wealth

These words speak for themselves.

10. The stock market is a no-called-strike game

You don’t have to swing at everything – you can wait for your pitch.

The problem when you’re a money manager is that your fans keep yelling, “swing, you bum!”.

You must not hit all the balls, expect correct, so you press the public.

This refers to opportunities. Wait patiently for the right opportunity; do not despair, because if you do you will be out of the game. If you wait for the one you can swing, you will have a guaranteed success.

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