5 investing lessons for Buffett – from his own rules
12:06 pm in Investing, Stocks by Jawahar Buddhavarapu
Warren Buffett is well known for his investing prowess, and more importantly, his investment discipline and returns. He has been the target of some criticism lately.
His investments in Goldman Sachs and Moodys have come under scrutiny, and he was summoned to testify before Congress. He has publicly defended both Goldman and Moodys for the roles they played in the Financial meltdown of 2008.
The article below takes a look at how Warren Buffett could have used his own rules to avoid being tangled up in this mess. The rules are summarized below. The full article from MSN Investing is a must read.
Lesson No. 1: Invest in what you know
Lesson No. 2: Be frugal, and buy frugal companies
Lesson No. 3: Be a contrarian
Lesson No. 4: Act like an owner when investing in stocks
Lesson No. 5: Playing with borrowed money is playing with fire
Now, I’m not so presumptuous as to try to instruct Buffett. He’s the sort of maestro one learns from. (In fact, one of my best-read columns ever for this website is “10 investing basics from Buffett.”)
Rating Buffett’s performance
But we mortals in the investing world too often make the mistake of learning the rules, then breaking them in the heat of battle. So it’s instructive to learn that Buffett sometimes does the same thing. It reminds us just how valuable Buffett’s basic rules for investing — and life — truly are.
With that in mind, here are a few investing lessons for Buffett — from his very own rule book, which he may have misplaced of late.
via Giving some investing advice to Warren Buffett – MSN Money.
