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Warren Buffett’s billion dollar secrets

buffettwithkids.jpgHe’s worth $52 billion (Rs 213,200 crore) and the Chairman of Berkshire Hathaway, the world’s greatest investor and the third richest man. He declared plans to give away over $37 billion (Rs 151,700 crore) in charity, to the Bill & Melinda Gates Foundation.

Here are some of his gems of advice for investors who look at the stock market to make a fortune, from various sources, his speeches and writings:

  • ‘Never invest in a business you cannot understand.’
  • ‘Always invest for the long term.’
  • ‘It takes 20 years to build a reputation and five minutes to lose it.’ If you think about that, you’ll do things differently.’
  • ‘Price is what you pay. Value is what you get.’
  • ‘Remember that the stock market is manic-depressive.’
  • ‘Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.’
  • ‘Buy a business, don’t rent stocks.’
  • ‘I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.’
  • ‘Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway.’
  • ‘Buy companies with strong histories of profitability and with a dominant business franchise.’
  • ‘It is optimism that is the enemy of the rational buyer.’
  • ‘As far as you are concerned, the stock market does not exist. Ignore it.’
  • ‘The ability to say ‘no’ is a tremendous advantage for an investor.’
  • ‘Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.’
  • ‘In the short run, the market is a voting machine but in the long run it is a weighing machine.’
  • ‘There are three kinds of people in the world: those who can count, and those who can’t.’

Image: Buffett’s Wealth Life Spane

  • ‘The first rule is not to lose. The second rule is not to forget the first rule.’
  • ‘Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.’
  • ‘You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.’
  • ‘Risk can be greatly reduced by concentrating on only a few holdings.’
  • ‘It is more important to say ‘no’ to an opportunity, than to say ‘yes.’
  • ‘It is not necessary to do extraordinary things to get extraordinary results.’
  • ‘It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.’
  • ‘The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.’
  • ‘I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
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