Invest Like Buffet: What Billionaire Warren Buffet Looks For in an Investment
Warren Buffet has a net worth of $90.3 billion. Almost all of which has been made by investing in the stock market…
HOW DOES HE DO IT?
Warren Buffet uses a strategy known as value investing. He wants to find a company whose value exceed’s it’s stock price. Let’s take a look what Warren Buffet looks for in a company he wants invest in.
Warren Buffet wants to make sure the company he invest in has great leadership/management. Everything runs from the top down so better leaders means better business.
He looks for companies that have a competitive advantage…a “secret sauce” If the product can easily be replaced or competed against then it’s not a great investment for him. That’s why he’s invested in Coke and Wrigley’s Gum. The internet won’t stop the consumption of these products.
A business he Understands
Buffet will never invest in a company he doesn’t understand, simple as that. You must know the business/product in and out and even better, use it on a daily basis.
Value Exceeds the Price
“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” – Warren Buffet
Cashflow & How It’s Used
Is the company generating good cash flow and are they using it to make more. I would suggest learning how to read financial statements if your going to get into value investing, great skill to have and can tell you a lot about the company.
Warren Buffet and his company Berkshire Hathaway currently are invested in companies like Costco, Walmart and Sirius XM.
His strategies clearly work and have made him and many other’s a lot of money, it comes down to doing the proper research and finding the right investments.