In this blog, we hear from Warren Buffett on successful portfolio management, value investing strategies, and what it means to be a successful value investor.
By following most advice from the Intelligent Investor himself, Warren Buffett is one of the few other value investors we happily listen to. Not only does he make investing interesting by likening it to baseball, pregnancy and socks… he also has amazing insights that can turn a portfolio right around.
For those who aren’t aware, Buffett is an American business investor and superhero. He’s consistently listed as one of the world’s wealthiest people, which is all down to his value investing strategy that’s taken the world by storm. His philosophy is to find value where no one else is looking and buy it on the cheap, and then begins the clincher to his winning strategy – he waits. Patience, and the understanding of when is best to sell, is what makes Buffett successful. But, let’s rather allow him to explain in this month's Buffettology.
10 Tips from Warren Buffett for Value Investing
Here we’ve gathered the quotes that we find most useful and insightful in becoming a successful value investor and managing a portfolio effectively. In these 10 quotes, Buffett sums up his value investing strategy and explains how others could follow in his path.
#1. Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
#2. Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
#3. You only have to do a very few things right in your life so long as you don't do too many things wrong.
#4. The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing, you bum!’
#5. Risk comes from not knowing what you're doing.
#6. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
#7. No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant.
#8. The best thing that happens to us is when a great company gets into temporary trouble… We want to buy them when they’re on the operating table.
#9. Never invest in a business you cannot understand.
#10. It's only when the tide goes out that you discover who's been swimming naked.
Sometimes all it takes to inspire a renewed look at your portfolio is a single quote. But, we do recommend reading further on our blog about portfolio management and how to invest in stocks to be a successful value investor. Or, you could download our Practical Guide to Value Investing: Running Your Portfolio below, and get right to the good stuff.