Warren Buffet is the wealthiest investor, he has over 50 years of experience in financial and investment sector. He always taught various investors where they have to invest their money. From childhood he invested his own money in different sector and always ready to take risk. Because of his success he has given nickname The oracle of Omaha. Many investors always focus on what the approach he used to get so much success.
So here are the Top 5 lessons every investor has to learn from Warren Buffet.
Warren knows how he will manage his own investment, because many people have not ability to manage their own investment where they put their money. For this he learnt all skill level and mental aptitude to develop his investment mindset. So everybody who think to become investors, firstly they have to develop investment mindset.
Long term Investing
By practicing all his skills, he learnt that to get success in investment, you have to focus on how you will remain for long term in market. If you think about to make money during short term its possibility that you will not get more success.
So during investment think about long term haul and use your mental ability to learn up and down of market.
Focus on value more than money
Before investing your money firstly think, because sometime amount of money you are investing don’t give value what you are expecting. Suppose you will buy Lamborghini but there is no guarantee that it will increase your overall value of lifestyle.
Market is very risky value depend upon demand and supply gap, so analyses all the information then according to that take investment decisions. Warren always try to buy stocks at that time when the price of that stock is at lowest point and by using this approach investing small amount in stock he gets more return.
Many people think before investing you have to know about modern financial model theory by this you will know details about the past and present value of the stock. But today Human emotion and sentiment also affect the stock that how many people are interested in investing in that stock.
So before investing we have to notice human factor also before investing our money. Warren said “Success in investing doesn’t correlate with IQ “what you need is the temperament to control the urges that get other people into trouble in investing.”
Invest in knowable company
Warren believes that you have not invest your money in those company which you cannot understand. He has given investment approach in four categories, The knowable, The unknowable, The important and The unimportant. He said that before investing you have to know all the important factors about that company, then go ahead to invest. Example Warren always stay away from tech company, because, he doesn’t know all the important factors, so he doesn’t know for how much time they have to remain in this company. So before investing know everything about company and hold for long term run, it will give more value of what you invested.