Warren Buffet Essay - 566 Words

Warren Buffet Warren Buffet of Berkshire Hathaway and His Investment Strategy Warren Buffet is arguably the most successful investor of all time. His initial investment of $105,000 in the beginning, ultimately grew into a $16 billion dollar fortune made from his trading company, Berkshire Hathaway. If you had invested $10,000 in Berkshire Hathaway when he took over the company in 1965, it would be worth $22,000,000 today. Warren’s stockpicking prowess however, is what he is know for and is also why Berkshire Hathaway has had a returning average of 24% a year for the last three decades. At the age of 69 he is one of the richest men alive, with a net worth of over $27,265,000,000.00, placed only second to Bill Gates. Since†¦show more content†¦The following are some parts of Warrens investing strategy. #61623; He is a long-term investor. He has said that you should invest in companies that you would feel comfortable with even if the markets closed for a few years and you couldn’t sell. #61623; He views investing as buying a piece of a business, rather than buying shares of stock. #61623; Buffet considers the following very important: return on equity, changes in operating margins, debt levels, capital expenditure needs, and cash flow. #61623; He determines the value of a company by totaling the net cash flows he expects to occur over the life of the company, discounted at the appropriate interest rate (Buffet uses 30 year bond rates), and possibly a premium based on the risk being taken. #61623; He prefers to hold a few great stocks rather than many good stocks. He thinks most investors misunderstand the nature of risk and the need for diversification. With these strategy tips for investing you can decide whether or not you want to incorporate these into your own strategy or not to at all. All of these tips can be useful in evaluating a stock, but remember this is Warren’s strategy. An example is his belief of not investing in companies that he doesn’t know about. One of these sectors has been technology stocks. He missed out on the Microsoft wave with only a 100 shares bought in the beginning, butShow MoreRelatedWarren Buffet712 Words   |  3 PagesWarren Buffet Warren Buffet was born on August 30, 1930. He is one of the most financially and personally successful businessmen of our time. He is the Chief Executive Officer of Berkshire Hathaway, a multinational conglomerate holding company, which is based with it;s headquarters in Omaha, Nebraska; Buffetts hometown. His net worth is around $60 billion, and increases with every passing minute. 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