Investment Advice from Warren Buffett: Part 1

As far as great investors are concerned, you don’t find them much better than Warren Buffett. Not only is he a shrewd stock investor, but he has also bought entire companies which he used to successfully grow the per-share book value of Berkshire Hathaway by 19.7% per year between the years 1965 through 2012.

When you look at the gain on the whole, you see that it is a total of 586,000% throughout his entire career. And, since the year 1965, the stock has grown by roughly 1,000,000% since that time. If you invested $10,000 in Berkshire Hathaway during 1965, your investment would be worth about $100 million right now. It’s safe to say that Warren Buffett definitely knows a few things about investing, correct? That’s why it’s certainly a wise idea to heed Buffett’s investing advice.

Let’s take a look at two important pieces of investing advice from Warren Buffett today. We will look at four more tomorrow and then close out this series with the final three on Thursday.

Let’s begin…

Optimism Is Certainly a Good Thing

“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts, the depression, a dozen or so recessions and financial panics, oil shocks, a flu epidemic, and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

When looking at this piece of investing advice, it helps put things in perspective. It helps remind us that no matter if the hiccup his big or small, the markets will continue to rise since that is the current trend.

You Do Not Need to Be a Genius to Make Money in Stocks 

Most people think you need to be this brilliantly skilled investor like Warren Buffett in order to make money on the stock market. But Buffett would disagree, as you can see:

“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.”

There are plenty of examples to prove this point. Let’s not forget the 1994 Long Term Capital Management hedge fund implosion. The company lost billions of dollars and had two Nobel laureates on staff at the time.

Stay tuned for tomorrow’s investing advice from the venerable Warren Buffett. Thanks for stopping by.

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