Warren Buffet is one of the world’s richest men. He has made his many billions by investing. Buffet has consistently outperformed the market over the decades, and that is a rare accomplishment.
Buffet’s investment philosophy has greatly been influenced by Benjamin Graham. According to Graham, what investors need to do is find great companies and buy them below their intrinsic values.
Graham also advocated diversification. On the other hand, his star student, Buffet himself, preferred to concentrate his investments. This can be seen when looking into the holding company he runs, Berkshire Hathaway.
Buffet isn’t known for spectacular short-term gains such as 100% or 200% per year. However, his performance has been consistent over several decades. With long-term compounded growth, those who invested a few thousand dollars into Berkshire Hathaway early on, and held on, are now rich. In June 2017, a single Class A share traded at $250,000!
As an investor, Buffet not only has invested in companies below their intrinsic values. He has selected companies that have a sustainable competitive edge, often with a unique product. One example is Coca Cola. What’s more, he actively got involved with managements of these companies, seeking to improve corporate performances.
Find out here how this trader made millions in the stock market.
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In this section, we reflect on what Warren Buffet, one of world’s greatest investors, has to say about investing.