Buffet's Investment Advice

Warren Buffet’s Secret Investing Rules
1 Never lose money
2 Never forgot rule 1
3 Never invest in a business you cannot understand
4 Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.
5 The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price
6 Risk –assuming you know what you are doing – can be greatly reduced by concentrating on only a few holdings.
7 An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business
8 Buy a business, don't rent stocks
9 Ask yourself: does the business have a consistent operating history?
10 An investor needs to do few things right as long as he or she avoids big mistakes
11 “Turn-around” seldom turn
12 Focus on return on equity, not on earnings per share
13 Look for companies with high profit margins
14 Always invest for the long term
15 Does the business have favorable long term prospects?
16 Remember that the stock market is manic-depressive
17 It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price
18 The dumbest reason in the world to buy a stock is because it is going up
19 Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can not buy what is popular and do well
20 I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out
21 Our favorite holding period is forever
22 Risk comes from not knowing what you are doing
23 If you don’t know jewelry, know the jeweler
24 If you don’t feel comfortable owning something for 10 years, then don’t own it f or 10 minutes
25 If a business does well, the stock eventually follows
26 A public-opinion poll is no substitute for thought
27 The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great plea sure from being with the crowd or against the crowd
28 When asked how he became so successful in investing, Buffet answered: “we read hundreds and hundreds of annual reports every year
29 I never buy anything unless I can fill out on a piece of paper my reasons.
30 I will tell you how to become rich. Close the doors. Be fearful when other are greedy. Be greedy when others are fearful
31 If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of safety
32 So, the more vulnerable the business is, assuming you still want to invest in it, the larger margin of safety you should need
33 The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage
34 Investors should remember that excitement and expenses are their enemies
35 The most common cause of low prices is pessimism-sometimes pervasive, sometimes specific to a company or industry. It is optimism that is the enemy of the rational buyer
36 Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing。