The full quote – “Our method is very simple. We just try to buy businesses with good-to-superb underlying economics run by honest and able people and buy them at sensible prices. That’s all I’m trying to do.”
This quote really sums up the essence of Warren Buffett’s method of investing. Firstly, he treats investment as buying a business – how many of us see it this way? He looks for business that have good business models that can earn healthy profits in years to come. The evaluation is on business, not stocks. Most importantly, the business must be ran by capable managers with integrity. Management is the key to a successful business as many decisions are crucial and have to be made rationally. Dishonest management can bring the downfall of a company – like Enron. Lastly, he buys good businesses at sensible prices. This is where he put Benjamin Graham’s teaching into use – buying at a price that entails a margin of safety.
Read more details of how Warren Buffet invests: The Warren Buffett Way
You may also like:
- The Warren Buffett Way – Robert Hagstrom
- Warren Buffett – “I’d be a bum on the street with a tin cup if the markets were always efficient.”
- The Winning Investment Habits of Warren Buffett & George Soros by Mark Tier
- Warren Buffett – "Risk comes from not knowing what you're doing."
- Warren Buffett – "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
- Warren Buffett – "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Discover the Secrets of Singapore Trading Gurus!
Interviews with Singapore stocks, forex, futures and options traders and trainers! This book is written for you:
- learn how professionals trade
- discover their strategies, money management and approach to the markets
- understand their stories and motivation behind trading
- know your trainers before attending their courses
