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Investing Like Buffett

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Warren Buffett, the Oracle of Omaha, is heralded by many as one of the greatest, most prophetic investors of our time. One of the most interesting things about Buffett’s financial success is that, as we all know, he doesn’t actually possess psychic powers. He simply follows a very rigid, conservative approach when it comes to investing. Let’s take a look at four quotes that have been attributed to Buffett to get an idea of why he’s so successful and what we can do to try and mimic that success.

Quote 1: Written in a letter to shareholders in 2008

“Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

This falls right in line with traditional advice to buy low and sell high. If you buy a quality stock while the price is rising, you’re not buying low and you might not be getting what Buffett would consider a discount.

Quote 2: From Of Permanent Value: The Story of Warren Buffett

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

You can’t retire in comfort unless you’ve planted your financial tree. Investing in the right positions, having income-generating tools like annuities and maximizing your Social Security can give you the “shade” you need to retire in comfort.

Quote 3: In the 2014 letter to shareholders

“Investors should remember that excitement and expenses are their enemies.”

It’s always important to consider the expense of an investment or other financial tool and to buy when you’re levelheaded rather than when you’re emotionally compelled either through fear or greed.

Quote 4: 2008 Charlie Rose appearance

“You want to be greedy when others are fearful. You want to be fearful when others are greedy. It’s that simple.”

This goes along with the prior quote and the concept of buying low and selling high. If you are greedy when others are fearful, it means you’re buying up positions at low prices while others sell. And if you’re fearful while others are greedy, it means you’re selling at higher prices while others are buying.

Financial advice isn’t one-size-fits-all, and it’s not a good idea to create a financial plan based solely on Warren Buffett quotes without consulting a financial advisor. However, these quotes do give some important guidelines that can help propel your overall financial success.

#oracleofOmaha #quotes #investments #guidelines #financingsuccess

Author: Dennis M. Postema

Video Production: Adam Grillot

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About Dennis M. Postema

Dennis M. Postema, RFC, is a successful entrepreneur, best-selling author, coach, speaker and registered financial consultant. He is the founder of MotivationandSuccess.com, StoriesofPerseverance.org, FinancingYourLife.com and TheRetirementInstitute.org.

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