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Warren Buffet is nowadays considered to be the godfather of investing. His strategies are well sought after by thousands of investors around the world. He is also known to be a frugal person despite his riches. His company was estimated to value around $69 billion last year. Here are some of his strategies that he shared with investors who are willing to succeed in the world of stock trading.
The strategies are merely guide questions one should ask himself before buying a stock or share. The first question is Does the management resist the institutional imperative? It means that the investor should look at the value of the manager whether or not he is able to perform well, with character under extreme pressure or if he just cave-in to peer pressures.
The second question is What are the profit margins? According to Buffet, a good company is one who has good profit margins, who handles the profit and financial side of the business excellently. According to him, a bad company is one that receives many sales but no profits because of the companys towering expenses. A responsible investor should always look into the spending habits of the company and on its financial statements.
The third question is What is the return on equity? Buffet tells us that equities are better than ratio formulas. He believes that the long term return on equity will have a more powerful effect than short term and simple earnings. By this, Buffet clearly states that investors should consider holding onto their stocks for a long period of time in order for it to have higher profit values.
These are just some of the strategies Warren Buffet followed and succeeded. It is important for investors to look this through and try to execute it in their own strategies.
The strategies are merely guide questions one should ask himself before buying a stock or share. The first question is Does the management resist the institutional imperative? It means that the investor should look at the value of the manager whether or not he is able to perform well, with character under extreme pressure or if he just cave-in to peer pressures.
The second question is What are the profit margins? According to Buffet, a good company is one who has good profit margins, who handles the profit and financial side of the business excellently. According to him, a bad company is one that receives many sales but no profits because of the companys towering expenses. A responsible investor should always look into the spending habits of the company and on its financial statements.
The third question is What is the return on equity? Buffet tells us that equities are better than ratio formulas. He believes that the long term return on equity will have a more powerful effect than short term and simple earnings. By this, Buffet clearly states that investors should consider holding onto their stocks for a long period of time in order for it to have higher profit values.
These are just some of the strategies Warren Buffet followed and succeeded. It is important for investors to look this through and try to execute it in their own strategies.
About the Author:
Mara Hernandez-Capili is a writer and a researcher on Business and Finance. Learn more on how to increase your financial I.Q. by learning about emini trading today. Start earning extra income by making your money work for you through the emini trading system. "Start your journey to financial freedom not tomorrow, not next week, but today.
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