Warren Buffett’s Take on Penny Stock

Warren Buffet is the third richest man in America so maybe he knows what he’s talking about when it comes to investing. This is a recap of an article about “WARREN BUFFETT PENNY STOCKS” written in the Huffington Post. He gives four rules to investing in Penny Stocks.

Warren Buffet lives in a modest home in Nebraska with no computers and only takes $100 000 for his salary. He gives a great deal of his fortune away. His investment rules are simple.

First is as he says “Rule #1 is to never lose money. Rule #2 is to never forget Rule #1.” What this means is you are not going to win all the time so don’t put all your eggs in one basket. You could lose all your money than not have any more to start again. Diversify and don’t get upset that you did not put more money into the stock that took off. Be glad with some rather than none.

Second and most important is to limit borrowing. Nothing good ever comes borrowing to invest in stocks. Remember history and the “Great stock market crash of 1929”. People lost everything that year. It may be faster to millionaire status but definitely not smarter. Play it safe!

The third is live simple. Take it one day at a time. If you strike it rich great! But don’t try to live outside your means. Think of how may lottery winners are poor within a few years. They were not prepared and just spent like crazy and got bored. Remember most of the good things in life are free.

Fourth is very simple “Be optimistic”! Work hard study your investments it will come. Read read and read. Don’t take for granted one persons’ opinion. Don’t get stressed about every investment. Persistence pays off. Remember live and learn!

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