See Warren Buffet’s Secrets as exposed by his ex-daughter in law.
Everybody wants to make money and be rich but not every know how to .From the little I know; if you must be rich you must understand the principles of wealth. Books like, The Richest Man In Babylon, Rich Dad Poor Dad, and Millionaire Next Door and Buffettolgy are what most people read to understand these principles.
Warren Edward Buffett is an American investor, business tycoon, and philanthropist, who is the chairman and CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of US$71.8 billion as of July 2020, making him the fourth-wealthiest person in the world. He is from the United States and was born in 1930.he has a net worth of 72.6 billion USD (2020). He has four children.
In 1962, Buffett became a millionaire because of his partnerships, which in January 1962 had an excess of $7,178,500, of which over $1,025,000 belonged to Buffett. He merged these partnerships into one. Buffett invested in and eventually took control of a textile manufacturing firm, Berkshire Hathaway
Warren Buffett, sometimes known as the 'oracle of Omaha', is one of the world's wealthiest men and a renowned investor. ... In 1962, Buffett bought out textile company Berkshire Hathaway, which he converted into a holding company within which he built a diversified corporate empire.
Mary buffet, Warren Buffets ex-daughter on her divorce with Warren Buffets son in her book Buffettology exposed all the secrets and techniques warren has used and is still using to become richer. She gave out her ex-father In-laws secret to whoever is willing and wants to become as successful as Buffet. In her book Buffetology, Mary gave insights on how buffet does his investments. Below is a summary of the different categories she gave insights on:
Business Perspective Investing
Invest only in companies whose future earnings can be reasonably predicted.
· Businesses that can be easily predicted generally have excellent business economics.
· Excellent business economics are usually evident by consistent high returns on equity, strong earnings, a consumer monopoly, and shareholder-friendly management teams.
· The price you pay will determine the return you can expect on your investment.
· Choose the business you would like to invest in, and let the price of the security determine the buy decision.
· Investing in the right businesses with exceptional economics at the right prices will produce an annual compounding return of at least 15%.
· Set-up a partnership structure that allows you to invest other people’s money and skim part of the proceeds.
· “Warren’s Winning Way” is first and foremost a question of figuring out what you want to own, and waiting for a price you’re willing to pay, namely a price that makes business sense.
The Excellent Business’ Expanding Value
An identifiable consumer monopoly, e.g. a brand-name product or a key service that people or businesses are dependent on.
· A strong and upward earnings trend.
· A conservative capital structure, i.e. low or no debt.
· A history of consistent high returns on equity.
· A history of being able to retain earnings.
· A history of being able to reinvest retained earnings in new opportunities, expansion of operations and/or share repurchases.
· The value-added by retained earnings will increase the market value of the company.
· The business is free to adjust prices to inflation.
· Low capital expenditure requirements.
In short, Warren desires businesses that seldom require replacement of plant and equipment, that don’t require ongoing R&D that produces products that never go obsolete, have little or no competition and excellent management teams. “Basic businesses with products that people never want to see essentially change. Predictable product, predictable profits.”
Warren believes that there are three types of excellent businesses that fall into one of two categories, consumer monopolies or toll bridges. “A consumer monopoly is an excellent company that has a brand-name-type product like Coca-Cola; a toll bridge is an excellent company that provides services that other businesses have to use if they want to do business.” (p. 287) The three types of businesses are:
1. Businesses that make products that wear out fast or are used up quickly, that have brand-name appeal, and that merchants have to carry or use to stay in business.
2. Businesses that provide repetitive communication services, which manufacturers must use to persuade the public to buy their products.
3. Businesses that provide repetitive consumer services that people and business are consistently in need of.
When Warren spots one of these types of businesses that possess several of the above characteristics, he bets big. He’s always been fund of a concentrated portfolio consisting of high-upside ideas that he understands well. Mary puts it as such: “Warren believes that diversification is something people do to protect themselves from their own stupidity. They lack the intelligence and expertise to make large investments in just a few businesses” (p. 173)
When to sell?
I’ll end this summary with a small quote on what is probably the investor’s biggest dilemma: selling. Warren has a refreshing take on this discipline: “Don’t try to buy at the bottom and sell at the top. This can’t be done – except by liars.”
This is not all; if you really want to learn get the book Buffettology by Marry Buffet
*don’t forget to follow for more info. Thanks.
Content created and supplied by: Jackapostle (via Opera News )
Opera News is a free to use platform and the views and opinions expressed herein are solely those of the author and do not represent, reflect or express the views of Opera News. Any/all written content and images displayed are provided by the blogger/author, appear herein as submitted by the blogger/author and are unedited by Opera News. Opera News does not consent to nor does it condone the posting of any content that violates the rights (including the copyrights) of any third party, nor content that may malign, inter alia, any religion, ethnic group, organization, gender, company, or individual. Opera News furthermore does not condone the use of our platform for the purposes encouraging/endorsing hate speech, violation of human rights and/or utterances of a defamatory nature. If the content contained herein violates any of your rights, including those of copyright, and/or violates any the above mentioned factors, you are requested to immediately notify us using via the following email address operanews-external(at)opera.com and/or report the article using the available reporting functionality built into our Platform See More