6 Investment Lessons From Warren Buffett That Will Make You Rich

From medium.com:

There is no one that exists today who is not familiar with the Oracle of Omaha. Known for his wealth, wit and humor, the Oracle often gives valuable lessons for everyone to learn and adopt. Learning from the successful is often the successful way to emulate them.

Some of them are :-

1. “Price is what you pay, value is what you get.”

Everyone waits for big deals to appear on the internet during festive times so that the products we want get discounted heavily. Here we are looking to pay lesser for a product with the conviction that the value it has or it provides is much bigger.

But why is it then that nobody does it while buying stocks. Everyone wants to buy stocks whose price keeps increasing, but that stock may not have the intrinsic value that justifies its price. What we should do instead is research and find out a stock which actually is valuable, maybe even in the future. Buy and hold these stocks ( be ready to see them tank to unbearable points sometimes). The value of these stocks is sure to be unlocked someday.

2. “If you buy things you don’t need, you will soon sell things that you need.”

You can make money not only by investing but also by saving smartly. There are so many ways that you can easily save money in places you usually splurge. It is wrong to think that one’s paycheck and investment returns are their only earnings. You are actually earning every penny that you save.

3. Avoid Losses

Warren Buffet says that not losing any money in the stock market is even more important than going after stock which are over valued in nature. Going after these stocks will give us short term benefits, but over the long term these stocks are plainly — OVER VALUED.

Look for stocks which are undervalued, buy them and hold them. Then see the magic that happens.

Do not forget that preserving money should always be one’s target. This does not mean that everyone should invest in low-risk propositions with guaranteed preservation of capital like some Govt. Bonds which after tax hardly gives any returns.

4. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Instead of buying stocks of middle of the road companies, buy stocks of companies which are extraordinary, or has potential to do extraordinary things in the future. Research on companies, find out what they are doing, how they are doing it different or if they are just one of the many companies doing the same thing in a tight market with lot of competitors…

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