Warren Buffett: Here’s how I follow the Oracle of Omaha’s rules on investing

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Warren Buffett is one of the most successful investors in the world and the billionaire philanthropist is one of my investing role models. To say, “When he talks, people listen” is an understatement.It’s very easy to research Buffett and his pages upon pages of investing advice as well as a series of well-known quotes which detail how the Oracle of Omaha successfully became an investing legend. Here is how I formed some of my investing rules through Buffett’s sayings.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Long-term investing“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” I am a huge advocate of investing for the long term. Buffett believes that investing is about minimizing risk to generate wealth over the long term, not generating short-term profits. One of my favourite sayings of his is “Our favourite holding period is forever.” I believe that this encapsulates the idea that investing should be about the long term.High returns with low risk“Risk comes from not knowing what you are doing.” This is simple, but brilliant. When investors have some success, they believe that this success in one area is transferable to an entirely different industry or arena. Stick to what you know and do your homework is what I take from this. Warren Buffett says “Never invest in a business you cannot understand.” He himself has largely kept out of the technology sector for the most part, given his lack of knowledge there.Warren Buffett: People make investing more difficult than it should be“The business schools reward difficult complex behaviour more than simple behaviour, but simple behaviour is more effective.” This is one of my favourite Warren Buffeett quotes of all time. His strategies are all about simplifying the process to make rational decisions. Buffett time and again makes the point you don’t have to be a genius to be a good investor, but instead there is a lot of due diligence and hard work involved. I believe it is human nature to sometimes complicate often simple things. I didn’t need Warren Buffett to teach me that but I believe he thinks the same. He says, “There seems to be some perverse human characteristic that likes to make easy things difficult.”How I invest like Warren BuffettI could probably write many more pages about the different principles of investing I have learnt through Warren Buffett. The points I have covered off are some of the main rules I follow around investing.I invest for the long term. I try to invest in a business or industry I understand or can learn about. Investing is not rocket science with multiple theories and complex equations, it is about hard work and doing your due diligence. I try not to over-complicate or overthink things. Buffett has owned many thousands of stocks throughout his illustrious career. Despite this, his biggest winners have only come from a handful. The examples which spring to mind are Coca-Cola, American Express, General Motors, Mastercard, and Johnson & Johnson.All of the companies mentioned are blue-chip household names in their respective industries. 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See all posts by Jabran Khan Markets around the world are reeling from the coronavirus pandemic…And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Warren Buffett: Here’s how I follow the Oracle of Omaha’s rules on investing Our 6 ‘Best Buys Now’ Shares Jabran Khan | Thursday, 19th November, 2020 last_img read more

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