"Buffett's Investment Principles": Value Investing in Stock Theology
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The importance of investment and financial management
In this era of rising prices, many people want to earn more money. However, when main incomes such as salaries are mostly limited, if everyone just saves money without seeking some investment channels, I am afraid that inflation alone will eat up our future.
It is said that “if you don’t manage money, money will not care about you.” Investment and financial management are obviously life issues that we cannot escape. However, the reason why many people regard investment and financial management as a fearful path can be said to have a good reason. Firstly, they lack correct financial knowledge and are unable to choose suitable investment tools; secondly, they are afraid that improper investment will be like gambling, and they will accidentally lose the capital they have accumulated over the years.
As for me, although everyone knows the importance of investment and financial management, due to the lack of correct understanding of investment, I do not have enough confidence and motivation to take action. I am very happy to have the opportunity to read the book “Warren Buffett’s Investment Principles”, which gave me a glimpse of the secrets.
Meet the stock god Warren Buffett
Speaking of “Stock God” Warren. Warren Buffett (Warren Buffett), even those who are less involved in the field of investment and financial management should have heard the name of this most successful investor in the twentieth century. He is not only a business tycoon with extensive knowledge of the world, but also the CEO and largest shareholder of the multinational conglomerate Berkshire Hathaway.
Warren. Buffett is most praised for his investment strategies and trading wisdom. With an annual return of up to 30%, he has created amazing performance and broke the myth that small money cannot be invested. It is quite suitable for the investing public to learn from.
He famously said, “I created the highest investment returns in the 1950s… If you gave me $1 million, I think I could make 50% for you in a year. Well, I know I can do it. I can guarantee it.”
From this sentence, we can see his confidence and cognitive mentality towards investment. Although the main body of this book is excerpted from Warren. Buffett wrote letters to his partners from 1956 to 1969, but through the author of this book, Jeremy. Miller’s interpretation vividly explains the investment philosophy of the stock god, such as reverse diversification investment strategies, the pursuit of compound interest, and the requirements to beat the market, etc., all explained in a very simple and easy to understand manner.
Buffett’s three major investment operations
These letters are like a simple and concise investment guide, allowing us to understand Warren through this book. The three major investment operations that Buffett was proud of when he was young include:
- Undervalued investment: Use qualitative and quantitative conditions to find companies that are seriously undervalued, buy when the stock price is low, and sell when the stock price rises back to its true value.
- Arbitrage investment: Look for companies whose M&A transactions are public but have not yet been completed, and conduct arbitrage in a low-risk way with guaranteed profits without loss.
- Controlled investment: Use the balance sheet to calculate the company’s value, obtain controlling rights in the company when the stock price is low, and require top management to transform the company and realize corporate value.
It is true that everyone can have different investment strategies, but after reading “[Buffett’s Investment Principles](https://www.books.com.tw/exep/assp.php/vista/products/0010749882?utm_source=vista&u tm_medium=ap-books&utm_content=recommend&utm_campaign=ap-201704)” not only helped me establish a clearer investment concept, but also learned to calmly analyze industry trends and look at investments from a long-term perspective with more patience.
Of course, this book is indispensable for the author Jeremy. Miller’s contribution. If he hadn’t carefully organized this information and transformed these letters into an easy-to-reference knowledge system, how could we easily learn and copy the investment principles of the stock god?
If you are also interested in investing but are hesitant, hurry up and read “Warren Buffett’s Investment Principles” with me!
The secret of investment is not to evaluate the impact of a certain industry on society or how good its development prospects are, but how strong a company’s competitive advantage is and how long it can last. Only when the superiority of products and services is long-lasting and profound can it bring generous returns to investors. By Warren． Buffett
★ Featured image source: unsplash.com
