Confused about investing? Check billionaire investor Warren Buffett’s 2-pronged strategy
Monday, July 15, 2019 IST
When it comes to investing, billionaire investor Warren Buffett keeps the rules of the game simple.
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When it comes to investing, billionaire investor Warren Buffett keeps the rules of the game simple. Berkshire Hathaway CEO follows some straightforward guidelines to decide whether it’s worth to invest in a business or not. Either the company has long-term value or he understands the basics of how the business works, the ‘Oracle of Omaha’ told CNBC’ during an interview in February this year. The veteran investor tries to analyse if the business will continue to hold competitive advantage in the ten years to come. “Nobody buys a farm based on whether they think it’s going to rain next year,” he said. The investors purchase the business as they think it’s a good investment over 10 or 20 years, he noted.
Since the fundamentals won’t change, it’s difficult to discover anything new about investments in the next 50 or 100 years, he also said. The other thing that Warren Buffett considers while investing is to not to park money in a business that is beyond understanding. “You have to learn how to value businesses and know the ones that are within your circle of competence and the ones that are outside,” he had then said. It’s important for investors to confidently assess the businesses they hold. It is not difficult to invest intelligently, even as it is far from saying that it is easy, he added.
Meanwhile, recently, an anonymous bidder agreed to pay a record $4,567,888 at an annual charity auction to have a private lunch with Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. Proceeds benefit the Glide Foundation, a charity in San Francisco’s Tenderloin district that serves the poor, homeless or those battling substance abuse.
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