What is Warren Buffett's preferred investment strategy

A little guide Invest like Warren Buffett

Buffett, sometimes called the Oracle of Omaha, is a living legend. The head of the investment company he founded, Berkshire Hathaway, is considered the third richest person in the world with assets of more than 80 billion US dollars. Most private investors are unlikely to make such wealth. Nevertheless, it is worthwhile to study the principles of Warren Buffet a little more closely.

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The seven most important rules of big investor Warren Buffett:

  • Invest only in companies whose business model you understand.
  • Companies are selected according to the principle of value investing.
  • Buy stocks that are significantly undervalued.
  • Firms prefer to weather the recession well.
  • Check the quality of management.
  • Recognize and take advantage of opportunities in turbulent times.
  • Think long term.

Invest with a long investment horizon

"Berkshire Hathaway's favorite holding period is forever," Buffett is often quoted as saying. However, this does not mean that the investor would not sell company shares once acquired if there were reasons for a sale. But buying a stock because a good quarter is ahead or an attractive product is about to be launched is not enough to make Buffett buy it. The experienced investor prefers companies that can withstand economic downturns. This is reflected in the Berkshire portfolio.

Berkshire Hathaway's favorite holding period is forever. "

Business model and key figures - the alpha and omega of every investment

Warren Buffett is considered to be one of the most consistent exponents of value investing. With this investment strategy, the investor looks for stocks that are undervalued by the market at the time of the investment. In order to recognize the value of companies, Buffett employs an army of people who examine the financial figures and management of interesting companies worldwide and meticulously prepare the investment decisions of the Berkshire boss. This evaluation process is laborious and requires extensive knowledge.

Private investors who do not have the time to obtain the necessary information would, in Buffets' opinion, be better advised to buy cheap investment fund shares instead of individual stocks. Alternatively, you can get help from an independent financial advisor and benefit from his many years of experience.