Regarded as the most successful investors of all time. As he is regarded as the most successful investor, his investment strategy must be regarded as well.
Millions of people have faith and belief in Warren Buffett, and his investment strategy and many want to learn from him as well.
Here I am sharing some key principles and strategies he follows, you may learn and become financially wise:
- Value Investing
Warren Buffett most of the time looks for undervalued stocks, but having strong fundamentals, he also pays attentions to the stocks, which are undervalue, fundamentally strong and trading below its intrinsic value.
- Long term focus
Buffett buys stocks with an intention to hold it for a long term, long time could be many years for Buffett. He often says, “Our holding period is forever”.
- Financial health
Buffett always analyze company’s financial health, some important measures are looking at Return on Equity, Profit margins, Debt levels and cash flow including among other criterion.
- Management Quality
He keeps management quality at the top of all criterion, he believes that a good management can significantly enhance the value of a business.
- Consistent earning
He prefers companies having consistent earnings, profit trends must be historical. Stability and predictability of earnings are the very crucial criterion while picking up the stocks for the portfolio.
- Patience and Discipline
Warren Buffett is very well known for his discipline and patience he pays a close attention to the fundamentals and long term potentials instead paying attentions to market predictions, short term trends, or short term market movements.
There might be more criterion Mr. Buffett must be paying attention, I have tried to include the criterion which can offer a great help to a common investor.
