$ 100 billion from investments: but how, Warren?
Warren Buffett is a living legend, an icon of investors all over the world. The richest investor in history! Some will say: it's so yesterday, Buffett invests almost nothing in technology, what can he teach us today?
However, there is something he can. Crisis survival strategies, for example. Buffett is one of the few people who managed to outplay the financial market when it seemed impossible.
The first time he did that was in 1958 with the Sanborn Map Company, a monopoly in the insurance business at the time. Warren Buffett analyzed the company's statements and realized that their stock price was considerably undervalued. He teamed up with other discontented shareholders, began aggressively buying shares on the public market, forced the board of directors to take drastic measures - and made 50% of the invested funds.
The second time he did it was with American Express. In 1963, the company's shares plummeted overnight from $ 65 to $ 35 - after a customer scandal. Warren Buffett invested 40% of his assets in these shares, and two years later their price tripled. He made good money off the scandal!
During the general stock market crisis of 1973-1974, he bought shares in the Washington Post newspaper, following their drop. He did roughly the same thing to Wells Fargo Bank shares during the economic recession in California in 1990. And so he did with many others.
And most importantly, in 1965, he bought a controlling stake in the Berkshire Hathaway textile company when the textile industry in the country had already been in decline for 10 years. This company later became his main investment tool, he managed to create an entire investment empire. Although Warren Buffett himself calls this purchase his mistake, because then he allowed himself to show flamboyance, which is at odds with his principles.
Now, about the principles. They provide the answer to the question of why Warren Buffett's strategy cannot get outdated and is now more relevant than ever. See for yourself, if you've already started investing, you probably follow some of these 10 principles:
1. Consider the long term potential. Ignore short-term market volatility and focus on long-term returns. Warren Buffett has repeatedly said that he prefers to buy "cheap securities" forever. When the choice is right, the time to sell them is almost never. He holds most of the packages in his investment portfolio for 10 years each. If you joined the project "Duyunov's motors" in the early stages, you follow this principle.
2. Accumulate knowledge about business and the stock market. Don't hurry. The investment market isn't going anywhere while you're learning. Especially since in the back office you have a lot of useful materials to study. For example, "Knowledge Base".
3. Build up your capital. You're going to need some initial capital, even if it's $ 100. Warren Buffett advises saving money and saying "no" to credit cards. And there is another way - SOLARGROUP partner program. With it, you'll quickly get the amount of money to invest in the project.
4. Stick to the areas you're interested in, the ones you're good at. You have chosen "Sovelmash" because you are interested in energy-efficient motors and you have gained insight into the "Slavyanka" technology - you are on the right track! You have long been interested in environmentally significant projects and are ready to support innovation - you have made the right choice, now just go for it! This principle of Warren Buffett is the reason why he rarely invests in technology. He once confessed that he understood nothing about them. However, this does not prevent his company Berkshire Hathaway from owning securities of Apple Inc.
5. Seize the moment of chaos. Warren Buffett advises not to go into a state of euphoria when the market takes all-time highs. But the panic in the markets, the crisis is a good time for an investor.
6. Don't be too smart, just control your emotions. Exactly so: Warren Buffett believes that investors do not need a high IQ, and advises those who have 160 points to give 30 points to someone else. The temperament that allows you to restrain emotions and wait is more useful for choosing the right investment strategy.
7. Ignore what others say. Draw your own conclusions. You don't have to be right about everything, you don't have to have your own opinion about every investment proposal, there are too many of them. It's enough to be right about a couple of companies that you have chosen because you understand how they work and believe in this business. "Sometimes a move can be missed!" - says Warren Buffett.
8. Take action when something crazy is going on. For example, the "+ 50% in shares" offer that ran in the project "Duyunov's motors" from July 1 to August 31. If you managed to take advantage of it, you made a good move, according to the principles of Warren Buffett.
9. Don't do anything if you don't see the right targets. Warren Buffett advises to keep capital in cash and not to invest anywhere in such cases.
10. Assess the management quality. Warren Buffett always finds out how honest management is with shareholders. With SOLARGROUP you have already made sure how important it is for the company to be open to dialogue, to communicate only trustworthy information and to keep promises.
By the way, Warren Buffett follows the principles in everyday life as well. He is known for always being willing to share his knowledge and not trying to impress others. He still lives in the house he bought in 1958 and is frugal in his everyday life. But he gives a lot of money to charity; together with Bill Gates, he co-founded the Giving Pledge company, which aims to inspire billionaires around the world to share their wealth with those in need.