The Oracle of Omaha is not self-proclaimed, nor does he drive a fancy car or own a fancy house. The modest billionaire who heads up Berkshire Hathaway has built an empire based on the strategy of ‘Buy and Hold.’ Investors that aspire to be like Buffet must exercise patience and look for value in the market. Bear or bull market, there is always money to be made. To invest like Warren Buffet, searching for those discounts is of the utmost importance.
Buffet has long said to invest in what you know. While he himself invests in preferred stocks, options and is spread across the board, he doesn’t suggest that people invest out of their comfort zone. He also didn’t start out investing like he does today, and he has long avoided certain sectors. Buffet is notorious for avoiding the tech sector. He did make an investment in IBM, but he threw in the towel this past year, as his position was losing money.
You win some and you lose some. Serious money requires a serious investor. Excited investors often learn lessons the hard way by biting off more than they can chew. The more money you build up in your portfolio, the more conservative you’re going to want to be. There is a natural learning curve to a degree, but investors have to realize that you don’t make serious money and become a serious investor by being greedy. Much of the quotes investors can find from The Oracle of Omaha direct people to invest in what they know and keep it simple.
As a matter of fact, Buffet likes index funds and specifically recommends Vanguard. Investors have to start somewhere. Options investing and selling naked put contracts is a little over the heads of new investors. There is money to be made in the market, but investors must know what they are doing and why.
Investors must be passionate about what they are doing and treat their portfolio like a business. When purchasing shares of a stock, they are buying into that business. With great risk comes great reward, but that risk and each move made should be measured. Knowledge is power, but to invest like Warren Buffet, you must have humility, patience and self control.