Warren Buffett is one of the most successful investors in the world. He has decades of experience in the stock market. He probably has this to thank for the fact that he can decide on a possible investment in just a few minutes.
• Buffett can evaluate investments at lightning speed
• Clear guidelines for quick decisions
• Star investor advises: Never invest in a company you don’t understand
Stock market star Warren Buffett relies on the value investing strategy when trading stocks. As a rule, he buys into companies in order to hold them for a long time. He relies on stocks that he considers to be undervalued based on the intrinsic or fair company value. When buying stocks, Buffett says it’s important to understand the company’s business and believe it offers long-term value.
As he once claimed, the Berkshire Hathaway CEO can make his decision about whether to invest in a company within a very short period of time.
Buffett can decide on a possible investment in just a few minutes
According to Benzinga.com, Buffett once claimed that he could decide on a possible investment “in five minutes.” This is based on a statement made by Buffett at a Berkshire Hathaway annual meeting. Here the star investor explained: “If we can’t make a decision in five minutes, we can’t make it in five months. You know, we’re not going to learn enough in the next five months to make up for the fact that we suffered deficits in the first place.”
Anyone who has ever looked at Buffett’s investment strategy knows that clarity and simplicity are important to the “Oracle of Omaha”: For him, an investment must be directly understandable. He tries to estimate the intrinsic value of a company. As he has repeatedly emphasized in the past, he relies on companies that he understands and avoids companies or industries that he cannot easily understand. His advice to investors is: “Never invest in a company you don’t understand.”
Stock Market Guru does not recommend his style of stock selection to the general public
Warren Buffett knows his business and with his strategy of quick and informed decision making, without excessive analysis and without leaving his sphere of competence, the Berkshire Hathaway CEO has been very successful so far.
So it’s hardly surprising that one or two investors try to copy his style. However, this is unlikely to work for very few investors. Buffett himself also advises average investors not to pick stocks in the same way, Benzinga reports. He recommends that most investors focus on index funds. These would provide a diversified and lower-risk way to participate in the stock market.
Editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
By the way: Berkshire Hathaway and other US stocks can even be traded on finanzen.net ZERO until 11 p.m. (without order fees, plus spreads). Open a depot now for free and secure a new customer bonus!
Selected leveraged products on Berkshire Hathaway
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on Berkshire Hathaway
The leverage must be between 2 and 20
Advertising
Image sources: Bill Pugliano/Getty Images, Adam Jeffery/CNB/CNBCU/Photo Bank via Getty Images
