In this post, I have shared some Useful Investing Tips from Warren Buffett.
You cannot become an expert at something without devoting great time to it. Passion is important.
Here are some Useful Investing Tips from Warren Buffett.
“Intensity is the price of excellence.”
Intensity does not mean trying to profit from the most profitable ideas. Instead, look for investments that are easy to understand – you are less likely to make errors in valuing this type of business.
The two Warren Buffett quotes below explain this idea:
“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
“There seems to be some perverse human characteristic that likes to make easy things difficult”
If you don’t ‘get’ investing, don’t keep investing in individual businesses. It’s far better to invest in high quality dividend ETFs than to play a game where you are the patsy.
“If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.”
Keeping with the analogy of investing and games, one should look out for the next great investment opportunity – not obsess over past performance.
“Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard.”
The ‘playing field’ is most attractive when there has been a recession. Of course – you will also have businesses that decline in value during recessions. You should not invest in equities in general if you cannot withstand this volatility.
“You shouldn’t own common stocks if a 50% decrease in their value in a short period of time would cause you acute distress.”
You cannot be successful in your investing career and be constantly swayed by changing opinions of outsiders. It’s very important to believe in yourself and trust your judgement.
“I had a great teacher in life in my father. But I had another great teacher in terms of profession in terms of Ben Graham. I was lucky enough to get the right foundation very early on. And then basically I didn’t listen to anybody else. I just look in the mirror every morning and the mirror always agrees with me. And I go out and do what I believe I should be doing. And I’m not influenced by what other people think.”
While you shouldn’t be influenced by what other people think, you should understand who is running the businesses in which you invest.