Warren Buffett Principles , will it make rich

Warren Buffett Principles , will it make rich ?

Before investing his principles , lets understand that his principles does not work for common investors.

  1. Even he had lost billion of dollars , that is less than 1% of his portfolio , so not a bigdeal for him. He lost dexter shoes stock  3.5 billion . In IBM stock he lost 1.5 Billion. If you lose 50K , that will be the majority of the loss in your portfolio.

  2. He does not got rich by investing his money, he risked people money and invested it. Remember you are investing your hard earned money.

  3. If his companies buys stock , he always buys is preferred shares for large purchases. It means he buys way below the market price. In 2008 , he bought Goldman Sachs for 5 billion , with 10% discount rate from market and agreed 10%  additional dividend . He already made several millions of profit on day one with this deal. The common investors don’t get this benefit , they buy at market price .

  4. Every investor strive to be value investors , not many succeed or able to mirror  the success.

  5. Greedy when other are Fearful, any investors would say that. In 2008 recession,  If you lost 60% of your portfolio, your home price crashed 50% , your job is at risk -you will be fearful ,you can’t be greedy at that time  and investing . No one knows what is the bottom of the stock , in 2008 many claimed as value investors and bought Lehman brothers – all they got back is 100% loss.

Leave a Reply