{"id":6723,"date":"2022-03-30T19:18:38","date_gmt":"2022-03-30T13:48:38","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=6723"},"modified":"2022-03-30T19:19:54","modified_gmt":"2022-03-30T13:49:54","slug":"warren-buffett","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/warren-buffett\/","title":{"rendered":"9 Investment lessons from Warren Buffett","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"
Warren Buffett is the man who has most probably inspired the creation of more millionaires than anyone else in the past seventy years. Warren Buffett is a legendary investor who many turn to for investment advice. <\/span><\/p>\n The question I am asked most often about Warren Buffett is \u201cWhat are his investment secrets?\u201d <\/span><\/p>\n If you are looking to invest in shares or want to improve your current strategy, you should read this article for some inspiration from one of the greatest investors of all time.<\/span><\/p>\n The great Warren Buffett has many lessons for investors. Here are nine of his greatest.<\/span><\/p>\n Warren Buffett says that the preservation of capital should be an investor\u2019s priority; this means that when you make a bad trade, get out. Don\u2019t panic and hold your position.\u00a0<\/span><\/p>\n \u201cRule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1\u201d<\/span><\/em><\/strong><\/p><\/blockquote>\n The stock market<\/a> swings up and down a lot at the whim of many factors. It’s important to stay focused on your homework, avoiding the temptation to follow the crowd.<\/span><\/p>\n If the business has immense growth potential, stay invested even in the worst markets to reap the best benefits possible when the markets turn around.<\/span><\/p>\n That\u2019s the first lesson Warren Buffett recommends to people who want to learn about investing. It seems simple enough, but it\u2019s very hard for investors to follow.<\/span><\/p>\n Investors make emotional decisions. They ask themselves \u201chow much will I pay for this investment?\u201d<\/span><\/p>\n But they should be asking \u201chow much is this investment worth?\u201d <\/span><\/p>\n You need to decide how much you are willing to pay for it, and then find out how much it is worth. If the price is lower than its value, go ahead and buy it. If not, don\u2019t buy it.<\/span><\/p>\n \u201cIt\u2019s far better to buy a wonderful company at a fair price than a fair company at a wonderful price\u201d<\/span><\/em><\/strong><\/p><\/blockquote>\n There are two things you need to do: first, you need to spot undervalued companies; second, you need to determine whether they have good potential for growth.<\/span><\/p>\n If you’re skeptical of this advice, you’re not alone. <\/span><\/p>\n You’ve probably heard it before, or at least some variation of it.<\/span><\/p>\n But if you think about the meaning behind this quote, and what it takes to act on it, things get more interesting. <\/span><\/p>\n What are greed and fear? <\/span><\/p>\n And how do we know when our fear is a good thing?<\/span><\/p>\n Warren Buffett is suggesting that your fear should come from your understanding of how people will react to something. <\/span><\/p>\n People can’t be scared by what they don’t understand.<\/span><\/p>\n So if you want to invest in something people are afraid of, first, you have to understand why they’re afraid of it.<\/span><\/p>\n If their fear isn’t rational, invest in it. If their fear is rational, don’t invest in it.\u00a0<\/span><\/p>\n “Be fearful when others are greedy and greedy when others are fearful”<\/span><\/em><\/strong><\/p><\/blockquote>\n To be a contrarian investor like Buffett, you have to be willing to go against conventional wisdom. That’s hard for most people because we are wired to follow the crowd.<\/span><\/p>\n Warren Buffett says you have to be prepared to hold a stock for the long haul. <\/span><\/p>\n And if you don’t feel comfortable with that, you shouldn’t own it at all. <\/span><\/p>\n1. As an investor, you should try to make sure that your capital is preserved.<\/span><\/h3>\n
2. It’s better to buy a great business at a reasonable price than to buy an average business at a great price.<\/span><\/h3>\n
3. It is probably a good time to buy if other people are desperate to sell and vice versa.<\/span><\/h3>\n
4. The Stock Market is a device for transferring money from the impatient to the patient.<\/span><\/h3>\n