The Bull Hunters Guide

In part one of the wisdom of Warren Buffett, we took him off his holy pedestal and brought him down to our level, now we’re going to begin explaining why this sort of treatment is exactly the kind of thinking that drives Warren Buffett’s investment decisions.

In the highly volatile and sometimes loopy world of global markets, Buffett is the champion of the pursuit for common sense stocks.

As a normal man, Warren Buffett looks at things realistically. He doesn’t paint big pictures, wear rose-colored glasses, think outside the “box”, act as the black sheep of the herd, or engage in any other number of investment clichés. In the end, these things are only gimmicky tropes.

Warren Buffett - Keeping It Simple

For several decades, a man from Omaha decided to follow what made the most sense to him by pursuing basic goods that are affordable and ingrained in everyday life. He invested in products and services that are pretty simple by any standard, but represent crucial elements that we may take for granted on a daily basis. Razor blades, bath soap, soft drinks, auto insurance, batteries - we all deal with this in our daily lives, and that’s exactly why Warren Buffett pursues them intently.

Warren Buffett - The Worlds Greatest Money Maker Pt1

Basically, one of the cornerstone principles behind Buffett’s effective strategy is to put investments into companies that will provide long-term returns. He doesn’t deal with fads or sudden technology surprises that are beautiful and rich today and totally obsolete and worthless tomorrow. To frame this concept, the man once said the following words if wisdom, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

It’s extremely simple, and we’ll continue to tell you why Warren Buffett is a genius of common sense in future entries, and provide a few examples. For now, we’re wrapping things up. Don’t go anywhere - there’s plenty of other series here to read to help you find out intelligent and exceptional investment strategies.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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We’re glad to have you back with us! We’re going to be discussing that most impressive giant of stocks, the unstoppable colossus of investment fortune, the shining avatar of unbelievable success, Warren Buffett.

To get gets started, we’re going to strip him of his halo. Warren Buffett is just your average man. Nobody intrinsically special, he’s basically like you or us in that he’s a human being doing his best to make good decisions in this crazy but wonderful global economy.

“How can you say that!?! Look at his successful portfolio!!”, you may be exclaiming right now. It’s easy. Buffett is an average man, yes. Which is both true and an absurd claim to make. Is that even possible? Most definitely. As an ordinary human being, Warren Buffett put forth the hard work and patience necessary to become extraordinary by believing in common sense.

Warren Buffett - How To Read Stocks

Called the Oracle of Omaha, there’s no mystical soothsaying with this man. He doesn’t deal with advanced scientific systems, or highly complex abstract numerical formulas. Not one to cloud his vision with smoke and mirrors, Warren Buffett made a sage out of himself by paying attention to basic human nature and mustering the unbreakable willingness to pursue a very simple and mundane path for investment potential.

Most investors today buy into all sorts of incredible investment contraptions, hoping to capitalize quickly due to high-risk payoffs. There are so many investment methods and stock pursuit options, it can make your head dizzy!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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Greetings once again, and thanks for returning for another exciting entry on developing a success mentality for investing. We’ve been covering the ways in which the most successful investors look at the market, and the things they pay attention to when determining risk and value.

With so many players in the stock market, it’s easy to feel lost among a tide of people making major choices on a daily basis. You may be wondering how they all factor into the values of companies, and what their behavior does when it comes to choosing investments for yourself.

Acting On Stock Market Trends

One of the things taught to us early with investing is to be original and pioneering, to act against trends, think outside the box, and beat your own path. If stocks are being snatched up, you should sell, sell, sell, throwing yours to the market to obtain immense profit. If people are selling theirs at a loss, then you should work quick to snatch them up.

There’s value in that behavior, but it’s not a sealed deal for success. Rather, it’s just another investment strategy, and one that is dependent on constantly changing factors that the most successful investors evaluate on their own terms. When it comes to stocks, sometimes it is a good idea to follow trends and stick with the herd.

For example, if a stock is falling, waiting it out before making a purchase may be a good idea. Others will flock to it in the hopes of realising profit, only to see that it continues to fall and gain back a small amount of value. You, on the other hand, decided to wait until the stock hit the bottom, so that your investment gained a considerable return when a portion of the stock’s price returned.

The basic principle at work here is that the market is flexible, and so there are many opportunities that exist beyond what people have come to expect. It’s simply a matter of learning to evaluate performance on your own terms and not by what “common sense” strategy told you.

That’s it for the sixth chapter. We now have one more to go in this series detailing how you can employ effective thinking for making your investments successful! Stay tuned for more next week!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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In part 1 of success mentality for investing, we covered the basic idea that a good state of mind is perhaps the most important asset you can possess. We will now move forward with this subject and address the ways in which you can improve your thinking and adopt the psychology of investment pros.

The first thing we’ll go over is probably the most obvious mode of behavior you can keep in mind when looking to make solid investment choices. Nonetheless, it’s also the one that’s hardest to master, especially in a field where stock values can suddenly surge or vanish overnight.

Avoid Panic With Your Investments

Basically, when facing the volatility of the stock market, avoid panic. This can’t be stressed enough. Panic is an emotion that destroys your ability to make sound choices and maintain sensible perspective on things. If you allow yourself to be overruled by this dangerous feeling, you’ll end up only making irrational choices that you’ll soon regret.

The stock market is a dangerous place for newcomers, and it’s still something that even the best investors will say that you can never stay comfortable with, because the future is always changing, and what’s valuable today could be gone in an instant tomorrow, and a single wrong choice may very well ruin all your assets.

Because of this, panic is exactly what happens most often to investors when they see the crazy changes of Wall Street (or their stock market of choice). They up liquidating their stocks or rushing to what they see as safe purchases - all without a clear head.

Alright, so we know that panic is a terrible thing. Still, it happens often. That’s natural. What do you do? The solution for panic is to keep it minimal and employ it as a positive factor to motivate you to succeed even harder with investments. In a market where nothing is guaranteed, you never want to rest. Instead, look to make your fear of unemployment or bankruptcy a matter that drives you to achieve your best under any circumstances.

That about covers it for now. We have a lot more to factor into this series, and plenty of ground to cover still. Hopefully you’ve learned a few things with this entry. Stick around and anticipate the next entry of developing the success mentality for investing!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2010

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Welcome back to our series on Asset Allocation. In the next few entries, we’re going to discuss the major techniques that you should keep in mind to ensure that you have a properly diverse set of investments to see you into the future.

Remember, if you put all of your investments in the same category, you are prone to sudden losses if that category should face some setbacks. Diversification is key!

Risk And Return

Our first tip concerns the constant parity between risk and return. Each investment you make carries with it a certain attribute that we call the “risk / return tradeoff”. This concept is the very essence of Asset Allocation because it represents the fine balance of diversity that you wish to strike in your portfolio.

For example, most people would say that their goal with investing is to make a lot of money. However, if we only considered those investments that had the highest potential for making money, we might put everything we had into high end stocks. If we did so, we might very well get rich overnight. On the other hand, as history has shown us, we might end up totally penniless.

Balance Your Portfolio

Therefore, it pays to balance out your portfolio with a nice mixture of low risk / low potential and high risk / high potential investments. For example, having a good assortment of bonds, mutual funds and the like would provide a continual, safe stream of income that would act as the core of your investment portfolio and prepare you for the future.

With that in place, you would be much better suited to invest some extra income into the high risk stocks, because in the event that they failed, you would still be left with the safety net of your low risk investments.

By spreading out your assets in this way across the spectrum of risk and potential return, you are getting the most out of your investments.

See you next week for part 3 of Asset Allocation.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009

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