Warren Buffet Strategy 2
Warren Buffet is the most famous investor in the world and was the richest man in 2008, after him is Microsoft owner Bill Gates. His company was estimated to value around $69 billion last year. He was the godfather of investing and a lot of investors (aggressive and day traders) are looking up to him for inspiration. He is also known to be a frugal person despite his riches. This article is written to provide us with the insight of his strategies in investing.
These strategies are merely guide questions one should ask himself before buying a stock or share. The first question is Does the management resist the institutional imperative? This statement means that the investor should look if the manager is able to decide with character when faced with difficult decisions or if he just gives in to peer pressure.
The second question is What are the profit margins? He tells that a company should be able to have good management skills in terms of its profits. Look deeper on how the company handles their profits. A bad company according to Buffet is one that has humongous sales but no profits because the profits are spent on company expenses. Try to look for a company with a good spending and financial handling and not one that is prone to overspending.
The third question is What is the return on equity? Buffet stresses that equities are better than ratio formulas. He believes that the long term return on equity will have a more powerful effect than short term and simple earnings. By this, Buffet clearly states that investors should consider holding onto their stocks for a long period of time in order for it to have higher profit values.
These are just some of the strategies Warren Buffet followed and succeeded. It is imperative for investors to look this through and try to execute it in their own strategies. - 23229
These strategies are merely guide questions one should ask himself before buying a stock or share. The first question is Does the management resist the institutional imperative? This statement means that the investor should look if the manager is able to decide with character when faced with difficult decisions or if he just gives in to peer pressure.
The second question is What are the profit margins? He tells that a company should be able to have good management skills in terms of its profits. Look deeper on how the company handles their profits. A bad company according to Buffet is one that has humongous sales but no profits because the profits are spent on company expenses. Try to look for a company with a good spending and financial handling and not one that is prone to overspending.
The third question is What is the return on equity? Buffet stresses that equities are better than ratio formulas. He believes that the long term return on equity will have a more powerful effect than short term and simple earnings. By this, Buffet clearly states that investors should consider holding onto their stocks for a long period of time in order for it to have higher profit values.
These are just some of the strategies Warren Buffet followed and succeeded. It is imperative for investors to look this through and try to execute it in their own strategies. - 23229
About the Author:
Mara Hernandez-Capili is a writer and a researcher on Business and Finance. Learn more on how to increase your financial intelligence by learning about emini trading today. Start earning extra income by making your money work for you through the emini trading system. "Start your journey to financial freedom not tomorrow, not next week, but today."
posted by X - Men @ 2:27 AM
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