Warren Buffet is the forth richest person in the world. warren buffet says,
"" The stock Market is a game , it is an instrument to reach wealth to those people , who are patient from the impatient people""
Impatient people are those , who want to be rich overnight by the stock market.
Stock market is not a gamble. The stock market is an instrument, you invest money in the business and the business earns money in the long term, then you get profit.
How to choose stocks for long term , check these for terms:
1. Business Quality
2. Management Quality
3. Financial Quality
4. Valuation- Reasonable Price
1. Business Quality:
"BUY WHAT YOU UNDERSTAND"
Are you able to understand the business??
- Product & services
- Operations
- Competition
- Competitive Advantage
First investing Rule #1 Don't Lose Money
#2 Don't forget rule no. 1 (because you lose all the potential compounded wealth with it)
check "" to estimate profit for next 10 - 20 years
" Then no need to worry about risk
2. Management Quality
"YOU CAN'T MAKE A GOOD DEAL WITH A BAD PERSON"
- are they candid?
- How do they talk?
- Do they accept mistakes? then they will fix it too
3. Financial Quality"
- Debt - free companies usually survive longer
- High return on equity
- High profit margin
- Pay Dividends
4. Valuation- Reasonable Price:
"IF CALCULUS OR ALGEBRA WAS REQUIRED FOR INVESTING; I'D HAVE TO GO BACK DELIVERING NEWSPAPERS"
- Estimated Value of whole business
Warren Buffet's 5 Investing Principles:
1. Be a business analyst
2. Choose the best
3. Bet big when it's time to
4. Ignore the Economy
5. When you buy a good company, hold it forever