Warren Buffett- An investor so prosperous that his name has become synonymous with successful, long-term, value investing. Indeed, if you had purchased $US1,000 in Berkshire Hathaway (Warren’s company) stock when he first bought it in 1964, your investment would be worth more than $US12 million today.
Unsurprisingly, much is written about his methodology, and how he has been able to achieve such terrific outperformance for such an extended period of time.
Helpfully, Warren often explains his investment approach, dropping small bits of wisdom for us mortal investors to disseminate.
- Overcome your fears and take advantage of market capitulation
Buffett has previously stated that “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.”
This is a classic contrarian viewpoint, expressing the view that the biggest of investments should be made when economic downturns are at their worst; when prices are at their lowest. Although this sounds like an easy bit of advice to follow, it requires both patience and courage, with an investment outlook longer than most are willing to consider.
- Spending more for investment advice and management is not a ticket to wealth
Buffett believes that “A number of smart people are involved in running hedge funds. But to a great extent their efforts are self-neutralizing, and their IQ will not overcome the costs they impose on investors. Investors, on average and over time, will do better with a low-cost index fund than with a group of funds of funds.”