World wide the Warren Buffett strategy is known for being very successful in stock picks. His value investment philosophy is from the Benjamin Graham school, and in 1965 he invested $10000 in Berkshire Hathaway. Today this investment is worth nearly $30 million! Had he taken the same amount of money and invested it in the "S & P 500" it would have grown, however the same investment would only be worth around $500 000.
This legendary investor who has his head screwed on right has become a myth in his lifetime. He is something of a bargain hunter and he pursues bargains as part of his value investment philosophy, which sees him buying stocks that other investors overlook. It is as though he can see something in under-valued stocks that other people don't see.
Value investors are able to identify securities with unjustifiably low intrinsic worth. This intrinsic worth is predicted by analyzing the fundamentals of a company and this is not seen by the majority of buyers. Warren Buffett essentially trusts that the market will eventually favor the stock he invests in.
He is not concerned with facts such as supply and demand. This is normally what controls markets, but Warren Buffett is not looking for short term gains, he is looking for long term, return on investment. The quote that best describes the way he thinks is: "In the short term the market is a popularity contest; in the long term it is a weighing machine".
Warren Buffett chooses stocks based on the overall potential of a company to make money as a long term prospect. Capital gain is not what he seeks and all the concerns he has are based on whether or not the company he targets is able to make money.
There are a number of questions he asks himself when evaluating the relationship between the price and the level of excellence of a stock. These include but are not limited to the return on equity in terms of performance, whether the business avoids excess debt, if the profit margins are high and are they increasing, how long it has been a public company and whether the company relies on a commodity for its products. - 23309
This legendary investor who has his head screwed on right has become a myth in his lifetime. He is something of a bargain hunter and he pursues bargains as part of his value investment philosophy, which sees him buying stocks that other investors overlook. It is as though he can see something in under-valued stocks that other people don't see.
Value investors are able to identify securities with unjustifiably low intrinsic worth. This intrinsic worth is predicted by analyzing the fundamentals of a company and this is not seen by the majority of buyers. Warren Buffett essentially trusts that the market will eventually favor the stock he invests in.
He is not concerned with facts such as supply and demand. This is normally what controls markets, but Warren Buffett is not looking for short term gains, he is looking for long term, return on investment. The quote that best describes the way he thinks is: "In the short term the market is a popularity contest; in the long term it is a weighing machine".
Warren Buffett chooses stocks based on the overall potential of a company to make money as a long term prospect. Capital gain is not what he seeks and all the concerns he has are based on whether or not the company he targets is able to make money.
There are a number of questions he asks himself when evaluating the relationship between the price and the level of excellence of a stock. These include but are not limited to the return on equity in terms of performance, whether the business avoids excess debt, if the profit margins are high and are they increasing, how long it has been a public company and whether the company relies on a commodity for its products. - 23309
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