Warren Buffett is arguably the greatest investor of all time.
And has averaged 20% annual returns for nearly 60 years.
Here are 10 of his lessons everyone needs to hear:
And has averaged 20% annual returns for nearly 60 years.
Here are 10 of his lessons everyone needs to hear:
1. Quality is everything
“Price is what you pay. Value is what you get.”
The price of something doesn’t directly translate to its quality.
That’s why overvalued assets don’t make good investments.
Instead, focus on value, then look at the price.
“Price is what you pay. Value is what you get.”
The price of something doesn’t directly translate to its quality.
That’s why overvalued assets don’t make good investments.
Instead, focus on value, then look at the price.
2. Master delayed gratification
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Building wealth requires patience.
You won’t get rich in a day, but you will get rich over a lifetime.
Understanding this is key.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Building wealth requires patience.
You won’t get rich in a day, but you will get rich over a lifetime.
Understanding this is key.
3. Think contrarian
“Be fearful when others are greedy and greedy when others are fearful.”
If you do what everyone else is doing you’re going to get the same results as everyone else.
If you want different results, take different actions.
“Be fearful when others are greedy and greedy when others are fearful.”
If you do what everyone else is doing you’re going to get the same results as everyone else.
If you want different results, take different actions.
4. Prioritize what you know, not what you don’t
“Risk comes from not knowing what you’re doing.”
When you hedge against risk, you hedge against the chance that you’re wrong or you miscalculated.
So instead, double down on what you know best
And less on what you know least.
“Risk comes from not knowing what you’re doing.”
When you hedge against risk, you hedge against the chance that you’re wrong or you miscalculated.
So instead, double down on what you know best
And less on what you know least.
5. The first rule of investing
“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”
Don’t go into investments prepared to lose.
Go into investments and intend to profit.
This is how you invest intentionally and strategically.
This is how you’ll build wealth.
“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”
Don’t go into investments prepared to lose.
Go into investments and intend to profit.
This is how you invest intentionally and strategically.
This is how you’ll build wealth.
6. Hold long term
“Our favorite holding period is forever.”
The stock market has never lost money in any 20-year period.
If you invested at any point in stock market history (and held) you made money.
The longer you hold, the higher your chances of making money.
“Our favorite holding period is forever.”
The stock market has never lost money in any 20-year period.
If you invested at any point in stock market history (and held) you made money.
The longer you hold, the higher your chances of making money.
7. Capitalize on opportunity
“Don’t pass up something that’s attractive today because you think you will find something better tomorrow.”
You can’t predict the future, but you can act on the present.
If you see an opportunity, don’t hesitate to take it.
“Don’t pass up something that’s attractive today because you think you will find something better tomorrow.”
You can’t predict the future, but you can act on the present.
If you see an opportunity, don’t hesitate to take it.
8. Have conviction
“Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years”
When you invest, you should have confidence in your long-term positions.
If you wouldn’t hold the asset for at least 10 years, you shouldn’t own it to begin with.
“Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years”
When you invest, you should have confidence in your long-term positions.
If you wouldn’t hold the asset for at least 10 years, you shouldn’t own it to begin with.
9. Buy the dip
“Profit from folly rather than participate in it.”
When the market is red, it’s your chance to buy assets at discounts.
But most people choose to sell discounted assets.
Doing the former makes you rich.
Doing the latter will make others rich.
“Profit from folly rather than participate in it.”
When the market is red, it’s your chance to buy assets at discounts.
But most people choose to sell discounted assets.
Doing the former makes you rich.
Doing the latter will make others rich.
10. Know what you’re doing
“Never invest in a business you cannot understand.”
If you don’t understand your assets, you won’t understand how you can lose money.
You also open yourself up to unnecessary risk.
Hedge against that risk by doing your homework.
“Never invest in a business you cannot understand.”
If you don’t understand your assets, you won’t understand how you can lose money.
You also open yourself up to unnecessary risk.
Hedge against that risk by doing your homework.
TL;DR:
1. Quality is everything
2. Master delayed gratification
3. Think contrarian
4. Prioritize what you know
5. The first rule of investing
6. Hold long term
7. Capitalize on opportunity
8. Have conviction
9. Buy the dip
10. Know what you’re doing
1. Quality is everything
2. Master delayed gratification
3. Think contrarian
4. Prioritize what you know
5. The first rule of investing
6. Hold long term
7. Capitalize on opportunity
8. Have conviction
9. Buy the dip
10. Know what you’re doing
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