Buffett Warren - How Buffett does it: 24 simple investing strategies from the worlds greatest value investor

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For most of us, the stock market is a mystery. Given the abundance of choicesome 7,000+ stocks in the United States alonehow in the world do you make money investing in the stock market? Which stocks should you buy? Who should you listen to? What strategy should you follow?

Many of us are still recovering from the Internet stock crash and are still wary of putting our hard-earned money in the market. Many of us have learned the hard way. It might have been because of a friends cant-miss stock tip, a stockbrokers recommendations, or a technology stock gone bust. One lesson learned by many is that get-rich-quick schemes all too often are get-poor-quick schemes.

If you are an investor who has been burnedwhether by brokers, the Nasdaq crash, mutual funds, day trading, timing-the-market systems, penny stocks, options, or high-tech, high-growth companiesyou really should study Warren Buffetts investment philosophy and approach.

A study of Warren Buffett reveals a proven get-rich-slow method for investing in the stock market. Buffett has turned acorns into oak trees through sound investment practices. You, too, can become a sound investor and make money in the stock market over the long termbut only if you follow his fundamental concepts and adopt his discipline, patience, and temperament.

Warren Buffett did not inherit one cent from his parents. Today, solely through his own investments, he is personally worth more than $40 billion. But from Harvard in the East to Stanford in the West, Buffett is rarely a topic of discussion in the classrooms of the top business schools. In other words, the greatest investor of all time is mostly ignored by academia.

I hope that you wont ignore Buffetts example. I hope that you will consider emulating his investment practices, especially if your previous investment experiences have been unpleasant.

In basketball, a mastery of the fundamentals is crucial to being a good player. A mastery of Buffetts investing fundamentals is crucial to being a sound value investor. These fundamentals include

1. A preference for simplicity over complexity

2. Patience

3. Proper temperament

4. Independent thinking

5. Ignoring distracting macro events

6. The counterintuitive strategy of nondiversification

7. Inactivity, not hyperactivity

8. Buying shares and then holding on to them for dear life

9. A focus on business results and value, not on the share price

10. Aggressive opportunism, seizing an opportunity when it is presented by stock market folly

These fundamentals, as well as others, will make you a better investor. Sound investment principles produce sound results.

Find a great business with great management, says Buffett, and buy shares at a sensible priceand then hold on to them for dear life.

When investing, keep it simple. Do whats easy and obvious, advises Buffett; dont try to develop complicated answers to complicated questions.

Many people believe that investing in the stock market is complex, mysterious, and risky and therefore is best left to the professional. This common mind-set holds that the average person cant be a successful investor because success in the stock market requires an advanced business degree, a mastery of complicated mathematical formulas, access to sophisticated market-timing computer programs, and a great deal of time to constantly monitor the market, charts, volume, economic trends, and so on.

Warren Buffett has shown this to be a myth.

Buffett has figured out a successful way to invest in the stock market that is not complex. Anyone with average intelligence is more than capable of being a successful value investor, without the assistance of a professional, because the fundamentals of sound investing are easy to understand.

Buffett will only invest in easy-to-understand, solid, enduring businesses that have a simple explanation for their success, and he never invests in anything complicated that he does not understand.

Remember that degree of difficulty does not count in investing. Look for long-lasting companies with predictable business models.