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đșAdvice From the GOAT Investor...
Here's some of Warren Buffett's best advice for long term investing!
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At Berkshireâs annual meeting, Warren Buffett was asked the following:
âIf you had to start again at $1 million and achieve a 50% annual return, how would you invest?â
This was his answer:
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Buffett started by saying heâd thoroughly research small companies with extreme detail.
Similar to how he used to study the 1,500-page Moodyâs manual.
The problem is that reading a Moodyâs manual isnât very appealing.
So, whatâs the digital equivalent of Buffett's strategy?
Start reading company financials, earnings reports, balance sheets, etc.
Or perhaps Bloomberg Terminal, SEC filings, S&P Capital IQ, stuff like that.
The point Buffett makes is that the money is in the details.
Unlike many investors who DCA into ETFs without much thought.
Nothing wrong with that approach, but it wonât get you 50% annual returns.
Buffett also emphasizes that this approach only works if you invest in topics you enjoy.
Otherwise, the process is too boring to stick with in the long term.
Plus, if you donât enjoy your research, you wonât go the extra mile.
You wonât discover any hidden nuances about companies thatâll give you an investment edge.
If you really want to beat the market by multiple factors, passion is a requirement.
Buffettâs strategy is simple.
Do the boring yet essential activities that provide great returns.
But make sure youâre investing in sectors youâre passionate about to offset the mundane aspects of investing.
As cliche as it sounds, passion is everything.
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