One investment expert Warren Buffett is widely recognised as the most successful & highly respected. Over the years Buffett passed on a wealth of knowledge in interviews & in particular, in his annual letter to shareholders.
In this newsletter, I am going to talk about SIX fundamental principles that I have learned by reading many of his annual letters.
- Develop good habits: What’s true of dieting I also true of investing: When starting an investment, it’s best to focus less on the end goal than on developing good habits of regular investments. The biggest mistake says Buffet, “is not learning the habit of saving properly”. Quote: “Do not save what is left after spending, instead spend what is left after saving”
- Think long term: Never mind get-rich-quick, work on getting rich slowly, which is far more realistic. Quote: “No matter how great the talent or efforts, something just takes time. You cannot produce a baby in one month by getting nine women pregnant”.
- Ignore market forecasts: Nobody knows where markets are heading in the short term. Quote “The only value of stock forecasters, is to make fortune tellers look good”
- Be humble: Another important lesson that investors can learn from Warren Buffett is that they probably know less than they think they do. Quote: “What counts for most investors in inviting, is not how much they know, but rather how realistically they define what they don’t know”.
- Keep it simple “There seems to be some perverse human characteristic,” says Buffet “that likes to make easy things difficult”. Successful investing is far more simple than many investment professionals make it look. Quote: “You only have to do very few things right, so long as you don’t do too many things wrong.”
- Stay calm: The most crucial lesson Warren Buffett teaches investors is to stay calm when others around you are overly anxious or excited. Don’t be your own worst enemy. Quote: ”The most important quality for an investor is temperament, not intellect.”
I look forward to being partners in your wealth creation journey
A friend & trusted financial advisor of families for years, adding value to financial portfolio