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Lesson 1: Basics of Investing (Warren Buffet's)
Lesson 1: Basics of Investing (Warren Buffet's)
PRICE
EARNINGS
BOOKVALUE
P/E<15
P/BV<1.5
15*1.5=22.5
Therefore, if P/E*P/BV<22.5
Then this is accompany one should look at
Overvalued companies has no margin of safety, so try to avoid them
His thoughts:
The market is nothing but a place where you go to buy or sell stocks
I buy on the assumption that they could close the market tomorrow and not
reopen it for 5 years-warren buffet
Some days you will get offered great buys, and other days you will get
offered horrible deals, your job is to know when its a bad deal
PATIENCE:
Anytime you find something that looks like massive returns means massive risk
Pigs get fat and hogs get slaughtered
Patience is truly a virtue. Take your time and dont try to get rich overnight. Never
try to break your rules.
INDIVIDUALITY:
Think for yourself- thats what all the great investors do
Ive often found that if I was doing what everyone else was doing, I was probably
doing it wrong