Warren Buffett Stock Picks
World wide the Warren Buffett strategy is known for being very successful in stock picks. His value investment philosophy is from the Benjamin Graham school, and in 1965 he invested $10000 in Berkshire Hathaway. Today this investment is worth nearly $30 million! Had he taken the same amount of money and invested it in the "S & P 500" it would have grown, however the same investment would only be worth around $500 000.
Looking at numbers like this is it not surprising that the Warren Buffett legend has also grown to mythical proportions. But how did he do it? By value investing, he like many other bargain hunters, looks for product that are undervalued, finds them and invest in their stocks. The majority of other buyers don't see the investment value in these products, but Warren Buffett does.
Value investors are able to identify securities with unjustifiably low intrinsic worth. This intrinsic worth is predicted by analyzing the fundamentals of a company and this is not seen by the majority of buyers. Warren Buffett essentially trusts that the market will eventually favor the stock he invests in.
His concern does not lie with the fact that supply and demand controls stock market intricacies and his famous quote "In the short term the market is a popularity contest; in the long term it is a weighing machine" is indicative of this.
He looks at stocks in terms of the company's overall potential to make money. Because he seeks long term investment value, capital gain is of no consequence, and this is what makes value investing so different to other methods of investing.
When he looks at an investment opportunity and evaluates the relationship between its stock price against the level of the company's excellence. He also asks himself certain questions, such as performance regarding return on equity, if the company avoids taking on excessive debt (we all know how he feels about debt), how long the company has been public and whether or not it relies on a commodity. - 23223
Looking at numbers like this is it not surprising that the Warren Buffett legend has also grown to mythical proportions. But how did he do it? By value investing, he like many other bargain hunters, looks for product that are undervalued, finds them and invest in their stocks. The majority of other buyers don't see the investment value in these products, but Warren Buffett does.
Value investors are able to identify securities with unjustifiably low intrinsic worth. This intrinsic worth is predicted by analyzing the fundamentals of a company and this is not seen by the majority of buyers. Warren Buffett essentially trusts that the market will eventually favor the stock he invests in.
His concern does not lie with the fact that supply and demand controls stock market intricacies and his famous quote "In the short term the market is a popularity contest; in the long term it is a weighing machine" is indicative of this.
He looks at stocks in terms of the company's overall potential to make money. Because he seeks long term investment value, capital gain is of no consequence, and this is what makes value investing so different to other methods of investing.
When he looks at an investment opportunity and evaluates the relationship between its stock price against the level of the company's excellence. He also asks himself certain questions, such as performance regarding return on equity, if the company avoids taking on excessive debt (we all know how he feels about debt), how long the company has been public and whether or not it relies on a commodity. - 23223
posted by X - Men @ 10:27 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home