Warren Buffett’s five investing don’ts

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#1
Warren Buffett’s five investing don’ts

US investor Warren Buffett is the world’s second-richest man after Microsoft’s Bill Gates with a fortune estimated to be worth about $66 billion. Photo: Prashanth Vishwanathan
WILL WILLITTS
Don’t let international events – such as the present confrontation with Russia over Ukraine – affect your investing, don’t be upset when your portfolio slides and don’t think you have to be an expert to make money are some of the tips Warren Buffett says are key to becoming rich.

In a three-hour session answering questions on CNBC’s Squawk Box on Monday in the US, Buffett, the world’s second-richest man after Microsoft’s Bill Gates, offered some advice on what not to do over the long-term to ensure your portfolio continues to climb.

His key five lessons are as follows:

1. Don’t let world events affect your investing decisions.

Even if the Oracle of Omaha said he knew a big war was unavoidable, “I will still be buying stock ... The one thing you can be sure of is if we went into some very major war, the value of money would go down,” CNBC reported him as saying on its web site.

“The last thing you want to do is hold money during a war. You might want to own a farm, you might want to own an apartment house, you might want to own securities. During World War II the stock market advanced. The stock market is going to advance over time.”

2. Don’t feel bad when stocks go down

Even as global markets began to gyrate because of the Russian military build-up in the CRimean region of neighbouring Ukraine, the 83-year-old head of Berkshire Hathaway said: “When I got up this morning I actually looked at a stock on the computer, on the trades in London, that we’re buying and it’s down and I felt good ... We were buying it on Friday and it’s cheaper this morning and that’s good news.” Asked if he would buy more, he replied: “Absolutely.”

3. Don’t think you have to be an expert to profit from stocks

“The stock market just offers you so many opportunities, thousands and thousands of different businesses. You don’t have to be an expert on every one of them. You don’t need to be an expert on 10 percent of them even. You just have to have some conviction that either a given company, or a group of companies ... are likely to make more money five or 10 or 20 years from now than they’re earning now. And that is not a difficult decision to come to,” CNBC reported Buffett as saying.

4. Don’t go for the quick profit

When Buffett, whose fortune was estimated in December to be worth about $US59.1 billion ($66.2 billion), was asked if activist investors were acting in the best interest of targeted companies and their shareholders, he replied: “Generally speaking, they are interested in making a quick profit and there’s no law against making quick profits. But our whole attitude in our own business and what we like to see with the businesses we own stock in is we want to run them for the people who are going to stay in rather than the people who are going to get out. At any given time, you can make more money, usually, selling the company. ... The answer isn’t to sell the company. The answer is to keep running the company well. ... I could do certain things to jiggle up the price of Berkshire in the short run. It would not be good for the company over five or 10 years.”

5. Don’t put your money into bitcoins for the long run.

When Buffett was asked about the latest craze of investing in the virtual currency Bitcoin, he was quick to reply: “It’s not a currency. It does not meet the test of a currency. I wouldn’t be surprised if it’s not around in 10 or 20 years. ... It’s been a speculative – a very speculative – kind of Buck Rogers-type thing, and people buy and sell them because they hope they go up or down just like they did with tulip bulbs a long time ago.”
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#2
相佛容易刻佛難 or 看花容易
繡 花 難
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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#3
(04-03-2014, 02:16 PM)greengiraffe Wrote: Warren Buffett’s five investing don’ts

4. Don’t go for the quick profit

This part quite difficult to explain to people who are not value investor. Many of my friends see profits, 10-20 cents, they want to quickly sell for the quick profits.
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#4
(05-03-2014, 01:52 PM)Breadman25 Wrote:
(04-03-2014, 02:16 PM)greengiraffe Wrote: Warren Buffett’s five investing don’ts

4. Don’t go for the quick profit

This part quite difficult to explain to people who are not value investor. Many of my friends see profits, 10-20 cents, they want to quickly sell for the quick profits.
Buffet usually invest in companies which have competitive advantage. Those can survive long recessions and war periods. Spore not many companies can do that. 10-20 cts profit out of how much? Usually when there is 35% gain i will take some profit.
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