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The Greatest Investors All Do This
5 investment principles from Warren Buffett
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Warren Buffett is the greatest investor of all time:
• First investment made in 1942
• $121.8 Billion net worth
• 5th richest person alive
• CEO of Berkshire Hathaway, market cap of $781.45 Billion
If you want to get rich, follow his 5 smartest investing principles.
Let’s get into it!
1. Time In The Market
Warren Buffett's father made him buy his first stock in 1942 at 12 years old.
Here's a chart of his net worth by age:
If he'd stopped investing at 52, he'd still clock in at an impressive $376M in 40 years.
As you can see, the true magic happened a few years later.
It's hard for humans to grasp exponential growth, especially what happens at the tail.
Time in the market will make you rich.
2. Buy When Others Are Fearful
Market downturns are just stocks with a discount.
As Mr. Buffett says:
"Buy when there's blood in the streets, even if the blood is your own."
Remove emotions from your trades, use reason to find quality stocks and buy when they are cheap.
3. Focus On Value
Don't get caught up in short-term, "get rich quick" schemes.
Pay attention to a company's fundamentals and competitive advantage.
As Warren says, "Our favorite holding period is forever."
Remember, pros play the long game. Only make high-quality investments.
4. Steely Resolve
Another famous quote goes:
"The most important quality for an investor is temperament, not intellect."
Yes, you need to be able to research and pick the right positions.
But the money is made in the waiting, and the only ones who wait are disciplined.
5. Only Buy What You Understand
If you don't understand the business you are investing in, then you are gambling.
"Risk comes from not knowing what you are doing."
When your positions are an accurate representation of your knowledge, then you can call yourself a true investor.
There you have it!
5 timeless investment principles from Warren Buffett.
After investing for 80 years, this man has the receipts to back up his words.
If you adhere to these principles, you are well on your way to becoming wealthy.
Now, let’s get investing!
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