Warren Buffett is often recognized as a genius. But he denies this. He recognizes what he does as a simple way of making money in a proven manner by investing in stable companies with timeless business models that return profit reliably. There’s no tricks to it.
However, one thing that backs up the proof of his genius is that he maintains a high level of foresight and understanding when it comes to evaluating his purchases. Not one to jump to conclusions, Warren Buffett manages an attitude of common sense backed by careful observations of market structure.
Evaluating Companies – The Warren Buffett Way
When Warren Buffett looks at a company, he looks at the whole deal in terms of serious questions such as, “Does this company sell products that people always need?”, “How how has the industry existed?”, “Are these name-brand goods what people identify with when they think of the product type?”, and several other hard-hitting questions that really examine the fundamental nature of a potential investment.
Warren Buffett owns a holding company named Berkshire Hathaway, which holds the largest number of stocks in some seriously huge businesses. For example, Buffett has basically all but purchased Coca Cola and Kraft Foods, two companies that represent the production of a large portion of ubiquitous goods at supermarkets across the U.S. Want another example of his investment mentality?
Ask yourself; when was the last time you heard a person casually refer to a soda as a “coke”. That’s where Warren Buffett finds his golden opportunities for investment heaven, because these items are enshrined in America as a way of life. They don’t go anywhere, and neither does the Oracle’s profits.
Warren Buffet – The Worlds Greatest Money Maker Pt3
Learning to invest like Warren Buffett will take time. Common sense is something we all enjoy – even if we don’t always use it – but you must hone your skills of evaluation and insight by looking deep at a company and its potential before deciding that its stocks are worth a purchase.
Anyways, that’s all there is for this entry. We’ll be back next week for part 5 of the Warren Buffett series, so keep checking back for more wise solutions for investments.
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2010
{ 10 comments… read them below or add one }
Thanks for this post.. Taking time to delve deeply is really a good idea, and when combined with instincts that are honed with experence.. I’m looking forward to learning heaps more.. and thank you again for the download of the Bullhunter’s Guide, I re-read it regularly to let myself soak up the knowledge.
Plenty more to come Jo. You can’t go too far wrong if you learn from people like Warren Buffett, that’s for sure. Great to hear you enjoyed the Bullhunters guide as well, my pleasure
I can understand why you follow Warren Buffet Sean he certainly is a person that would be a good teacher and a person to follow.
It would be hard to find a better person to model from to help achieve investment success Richard, that’s for sure.
Yes, Mr Buffett is a superstar. Even more so because what he says is common sense. He has no tricks or gimmicks. Just invest in things you understand, choose businesses that are protected by a moat (such as a unique point of difference) and buy when the stocks price is below its value.
Hi common sense attitude and back to basics approach to investing is what I like most about him David. Warren Buffett is a superstar indeed.
Hi Sean,
Thanks for this post.
Warren Buffet is an awesome roll model for any investor. He has a simple strategy that works, but I find that a lot of people are only in for the fast buck and end up losing their capital to speculation all to easily. I learnt this lesson the hard way. It’s better to protect your assests the best way that you can and Buffet does this by investing in solid companies and taking control of the management to help insure his position. If you can’t buy a company then buy PUT options as insurance to protect your investment. Plus Warren Buffet just seems like a nice down to earth guy.
Can’t wait for the next post.
Jon.
Many investors could enjoy a lot more success if they applied some of the investing strategies that Warren Buffett employs, that’s for sure Jon. Like keeping it simple and investing in quality companies that have stood the test of time.
Well if Warren Buffet says he’s not a genius, then I’d like to be not a genius in the same way too!
I think he is one of those rare people who can see the big picture and the details at the same time. Most of us are stuck with one or the other. I think that is the clue to good evaluation skills.
Of the people held up in Sean’s blogs, the combo of Napoleon Hill and Warren Buffet is more than enough!
The YouTube vids are fascinating.
Hi Sean,
I’ve never really looked at Warren Buffet before as I’ve never done my own buying and selling of shares. Buffet is an incredible man. I can’t believe what I’ve been missing. Thanks for posting these videos.
Buffet seems like this very down to earth man who makes decision with good judgment and common sense. He doesn’t seem to complicate it at all. Does he ever use any software or charts to help him choose stocks. Or is it always fundamental analysis?