When Waren Buffett gives his unusual personal investing advice, people listen and take notes. Buffett is not a technical investor and bases his investment decisions on the value of his investment and makes a common sense analysis that does not disrupt his life. His advice towards investments in companies is based on such principles as:
* Do not sell stock for a strategic reason but sell if you need the money and trust the long-standing success of the market
* Take advantage of opportunities and be humble.
* Only look to the future
* Do not borrow but invest your own money
* Treat people well and establish relationships
* A higher cost is not necessarily a superior service
* Don’t follow the crowd and buy low and sell high
* Cut your losses
* Don’t focus your energy on all the money you have
Buffett must take his advice seriously because in 2013 he made $37 million a day.
When Buffett invests in a company, he considers the following factors to evaluate the company:
* The company must have a positive return on equity over a
significant number of years.
* The amount of the company’s debt.
* The company’s profit margin.
* The Uniqueness of the company’s products
* Whether the shares are discounted when being traded.
* What is the bottom line.
Warren Buffett controls and leads Berkshire Hathaway, a holding company, which has provided Buffett with vast wealth. Berkshire Hathaway has over a fifty-year relationship with Warren Buffett. Berkshire Hathaway wholly owns over 59 subsidiaries and has part ownership in other companies. Some of the subsidiaries include BNSF Railway, Helzberg Diamonds, Pampered Chef, Long & Foster, GEICO, NetJets, Lubrizol, FlightSafety International, Dairy Queen, Fruit of the Loom, Applied Underwriters Insurance, Ben Bridge Jewelry, Berkshire Hathaway Assurance, Bond Insurance and Benjamin Moore & Co. More subsidiaries are acquired on a regular basis.