5 Investment Recommendation from Warren Buffett

When it comes to world-class investors, no one doesn’t know the most successful investor of the day, Warren Buffett. To understand the ideas of successful people, ACU PAY will share five investment tips from Warren Buffett. Let’s go.

1. Invest in an asset that is always productive (productive asset)

Invest with effective assets, from Warren Buffett’s point of view, he suggested investing in companies that are constantly productive, such as real estate, businesses that produce goods or services, and farms. These assets can generate cash flows that can be invested into assets or other targets. Buffett said that this type of investment is more interesting than investing in gold where we can only look at prices up and down and can do nothing. In addition, these assets can always clearly account for costs and profits.

2. When buying stocks, you should plan to hold in the long run

Buffett suggests investors focus on long-term thinking and avoid short-term thinking because he believes the market is always volatile. The longer any investor holds that stock, the more returns they will get. Buffett also said, “Buy what you’re most happy with and you won’t regret it if the stock market closes for 10 years.”

3. Focus on focused investment rather than spreading risks around

Buffett said, “If you find a good stock, Why are you buying so little?” He believes in focused investment but denies risk diversification. Since focused investments generate amazing long-term returns, Buffett recommends buying as many good 5-10 companies as possible because it is easier to track the company’s performance and information than investing in 20-30 stocks. He also recommends investors to read and develop their knowledge before making investment decisions.

4. Don't be shaken by short-term fluctuations

Warren Buffett once said, “If you bought a house for $20,000 and the next day someone asked you for $15,000, you certainly wouldn’t sell it just because you were offered the price.”

What Warren Buffett wants to convey is that many investors are more sensitive to volatility and are ready to sell their shares just because of the changing prices day by day. He said if investors understand and study enough businesses, the shake to price volatility will have no impact on their mentality because they know that daily stock prices are not related to long-term business potential at all.

5. Buying stocks is like acquisition

Buying stocks is like becoming a partner of the owner who would share profit or loss. Thus, what should pay attention to the most in the business is the understanding in that business.

The key principle that Baffette uses in the purchase of shares is as follows:

  • Have an understanding of that business
  • The company has a long track record of operating.
  • Run a business by capable and honest executives
  • Stock prices are interesting.

Buffett said, “If business goes well, stocks will eventually be good.” This means if investors understand that business, they see the strengths and fundamentals of a firm and stable business. Investors should invest in it for future profit growth.

Warren Buffett’s investment is always focused on productive assets, choosing long-term investments rather than short-term returns, focusing on focused and does not spread the risk around, investments, and studying stock details as if we were the business owner is better than superficial knowledge.

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