Warren Buffett's investing strategy is value investing, focusing on undervalued stocks with strong fundamentals for long-term

What is Warren Buffett’s Investing strategy?

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Introduction –

The Warren Buffett’s investing strategy involves value investing, seeking undervalued companies with strong fundamentals for long-term growth. Almost all billionaires in the world are made up of business ideas, Warren Buffet is the only person who has become a billionaire by investing. In an area where it is said that there is less profit and more loss, getting continuous success in such a field should such a long period is definitely be a matter of our revision. In April 2021, whose net worth was US$ 100 billion and became the seventh richest person in the world & major shareholder of Berkshire Hathsway.

If you want to be financially successful, then you should start at a young age, which he made his first investment in the 11th year of age, he took three shares of Citi Service at $ 38, which immediately after taking it reached $ 27 and little Warren was very scared of this, because of which he immediately sold them as soon as the share price reached $ 40. Later on the shares reached $ 200, only then he regretted his decision very much and since then he learned one thing and that is “patience”

The secret of his success is the habit of constant reading, he reads about 500 pages a day, from this you can get an idea of ​​his knowledge. He likes to live a simple life, lives in the same house for 40 years and used to use Samsung’s flip mobile till 2020, on 2020, the CEO of Apple presented him Apple’s mobile, in which he has 5% shares holdings. The gifted i-phone he only use for taking calls and for making calls. from this you can guess about their simple lifestyle which is the subject of inspiration to millions of people.

Today we will know about them, why even by doing investment management one can become Rich because the proof of speculative investment in India is 80%, so it is very important to know the rules of investment of Warren Buffet for you who never believe in speculative investment. He always believe in long term investment and also in good companies, rather than short term trading.

Profile of Warren Buffet –

  • Name – WARREN EDWARD BUFFET
  • Born -30 August 1930
  • Education – BACHELOR OF SCIENCE (NEBRASKA UNIVERSITY )
  • MASTER OF SCIENCE (COLUMBIA UNIVERSITY)
  • Investor in – Apple, Coca-Cola, Bank of America, American Express, Visa, Mastercard, he has a stake in about 65 companies.
  • Ownership of – Berkshire Hathaway
  • Net Worth – $93.80 billion dollars ( 24 Sept. 2022)

Personal Life of Warren Buffet –

His father was a stockbroker who later became a politician, Warren Buffet was very curious about the stock market since childhood, so as a child, he always observed as how many cold drinks are sold in his Grand Father’s shop during the day. He used to know about the bottle caps lying there and from that he made a profit of 5 cents by selling Coca-Cola bottles in his childhood. He made the first investment of his life at the age of 11. At the age of seven, he read a book called “The One Thousand Ways to make $1000” which guided his goal of life as a child.

While he was managing his father’s brokerage house, he met Susie Thompson and the two married in April 1952. In personal life, he lives his life very simply, but he does not like to live like Super Rich people, he gives a lot of his life’s earnings to charity. Bill Gates is his best friend and both spend hours with each other.

Warren Buffet & Benjamin Graham  –

21-year-old Warren Buffet was very impressed by reading Benjamin Graham’s books because he had also been his teacher. Warren  got an opportunity to work together and learned all the investment skills from his mentor and combined his analysis with him, he followed this rule of his life while investing. Benjamin’s laws were only in mathematical form, on paper and he considered them very important.

After analyzing all this, there is no need to look at other things for investing, he believed that, but Warren Buffet had a different view on this. Warren Buffet believed that mathematical analysis was needed, but by entering the company to see how the company was to invest, he believed that the finer information of the company could be beneficial for you investment. He considers this the most favorite book of Benjamin Graham’s “The Intelligent Investor”.

Warren Buffet and his Investment Methods  –

As we know, he has given 80 years to investment management, earning from 5 cents to 103 billion dollars, so his investment methods are very valuable to us which we will see next.

  • The main rule of Benjamin Graham which is to determine the value of the company at the original price of the company i.e. Total Assets, this principal never forgets.
  • It is important to see how the profit of margin company has, but along with that profit of margin it is also important to see how the management of that company increases the profit of that company with its ability.
  • The most important investment method is a long term investment which requires a lot of research and patience.
  • He had another method of investing in which you should invest only in what you understand, he always stayed away from investing in technology company, he had only one belief, do not buy those stocks who do not sit in his fundamental rules.
  • While investing in any company, think that I am buying the whole company, only then you will be able to understand the true value of that company.
  • It is good to buy shares at low price but buy expensive shares of quality company which is sure to increase in future.
  • While investing in the share market, always keep cash in your hand because you cannot speak when you will get the deal to invest.
  • Before buying any stock, it is most important to take care of Margin of Safety, which reduces the chances of loss.
  • Investing for the long term This is the magic formula of compound effect, so keep patience and make a long term investment strategy without fear.
  • It is also important to know the total loan amount of the company before investing.
  • Always stay away from the daily activities of stock market otherwise it scares you and your investment every day.

One of his childhood friends used to work in Microsoft and he wrote a mail to Warren Buffet, although till that time he did not reply to the mail to anyone, but he wrote a reply to this mail and wrote about the technology company, why he does not invest That mail was leaked by the US intelligence organization and published in Wall Street, he was very upset because it was his personal mail, since then he stopped replying to any mail because it could harm any company because of his statement. He didn’t want to.

He is such a big investor in the world that when he invests in a company in the US stock market, that share increases by 10%. Therefore, their investment ideas is considered proof of investment all over the world.

Warren Buffet and his reading habit –

He has a habit of reading since childhood and his reading habit is followed by many billionaires because due to this habit he has not retired even at the age of 90. Reading is the most important habit of staying fit, 80% of our diseases Because of our mind and to keep it strong, then he knows very well to earn a lot of knowledge and keep the mind fit apart from being physically fit.

In his life, he spends more and more time reading books, he spends about 10 hours a day in reading and he does his main investment work with very little but planning. He reads about 500 pages in a day, so you can imagine how passionate he is towards reading his books. It is very difficult to read 20 pages every day to a normal person, but his reading habit is exceptional to any human beings.

If we look at reading 20 pages, then we start feeling troubled, but because of his reading habit since childhood, he has got used to fast reading, so he is able to read so much. Next we will see which are the best books he has read because it is important to know that without knowing how Warren Buffet became this Warren Buffet, you cannot get inspiration to earn money from him.

Best Books Read by Warren Buffets  –

  • The Intelligent Investor – Benjamin Graham (1949)
  • Security Analysis – Benjamin Graham & David Dodd
  • Common Stock and uncommon Profit – Philip Fisher (1958)
  • The Little book of common sense investing – John C Bogle (2007)
  • A few Lessons for Investors and Managers – Warren Buffett (2019)

Conclusion –

Warren Buffet never made speculative investments to invest in his company. He stuck to his fundamentals in an 80-year investing career, so the web site boom and the good success of tech companies never attracted him. In his life, he has decided that he will donate the main part of his earnings for the society, seeing that even today at the age of 90, earning money is not his aim but he has given more importance to his principals.

There were many occasions in personal life where he was shattered, but his passion for his profession never allowed him to retire. Those who call the stock market a speculative market and those who want to change the rules of investment by forgetting the main rules of the stock market.

For all those people, his continuous 80 years i.e.  his first investment at the age of 11, till today, he has not left the fundamental rules of investment, so he is the first billionaire in the world who has been made by investing, he did not create any business, any business idea But he gave the rules of investment as inspiration to the common investor of the world, who can make anyone Rich  if he follows these rules.

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