Warren Buffet - Principles that Made Him Top Stock Market Investor

Warren Buffet – the Grand Master in Share Market

Warren Buffet is at the top-end of the list of the richest persons in the entire world. He is a role model to Stock Market investors. To scale such heights, what could be his strategies to become a successful investor? What principles he followed? Let us get to know about them.

It is impossible to predict the wavering trends of stock markets. Warren Buffet is the person, who has practically proved that priceless treasures of prosperity are hidden in the wavy trends of Stock Markets and that enough if one knows the tricks to extract them.Every word comes from out his mouth is a path finder to the investors. Know the plans he followed…follow at least some of them…you will be transformed into a successful investor!

* Warren Buffet suggests that every investment in stock market must be carefully taken care of. There are two primary principles he follows – one is that there should never be any loss to the investment and second one is not to ever forget the first principle. Buffet always tells that these two requisites only have made him to reach this present stage.

* Warren Buffet never even peeps into a business he is unfamiliar with. Some people have good understanding in some areas and some others have in other areas. They have the related analytical skills in their respective areas. Always invest only in those areas, in which you have good understanding and gained such skills; that it will take the needed care of your investment.

* Warren Buffet says Companies, which show good results with their inherent strengths even in a competitive environment, can grow faster. Such companies in stock market provide both security and growth to the investments. Identify the companies in share market, which spread their activities on the entire globe and those which have international identity and invest in them; they will provide good growth to the investment.

* Sometimes in stock market, unexpectedly shares of some successful companies will become available at attractive prices. Warren Buffet never ignores such rare opportunity and grabs them.

* Always give the same importance in purchasing the shares of a company as if that you were purchasing the company itself. Warren Buffet says once you have the correct understanding of business, you can draw conclusions on the efficiency of a company. One of the successful stories of Buffet is -purchasing shares of successful companies at low prices.

* Shares of extra-ordinary companies can be purchased at reasonable prices, but not of less efficient companies buffet thinks.

* As per Warren Buffet stop assessing the market; don’t think too much about state of economy, interest rates and influence of elections on the stock market. Analyse and assess the strength of a company, its values and its future. If everything you feel favourable to you, purchase its shares.

* To minimise the risk of loss, restrict your investments to 5 to 10 companies in stock market. It facilitates you to make in-depth study of those companies. Many financial experts suggest that investments should be diversified to reduce the risk of losses; but Warren Buffet invests differently. If he likes a company in share market, he invests in it heavily. He believes that perfect understanding of a company will give the anticipated returns in stock market. Investors should make a note of this. Purchasing shares at the opportune time, while minimising the risk of loss, gives attractive returns also.

* You pay the price… you get the value out of it – make a note of this.

* It is important to invest in stock market shares when their prices are attractive. Warren Buffet purchases shares only when he feels that the price of share of a company is less than the value of the company. Think about investing where there is no risk at all or there is minimum risk of loss.

* Warren Buffet advises if you are an investor, keep an eye on the functioning of the company and if you are a speculator, speculate in the price of the company’s shares.

* In the view of Warren Buffet, a successful investor is one, who is nervous when the other investors are participating in the stock market transactions with enthusiasm, and who becomes enthusiastic when the others are nervous and backing out. Many people think about shares, which are interesting; when they like them and fall on them, it is sure they incur losses.

* Another principle Warren Buffet strongly believe is – take correct share market investment decisions, reduce erroneous decisions – then only it would be possible to see growth in wealth.

Warren Buffet has grown to this towering position as a perfect investor by following not only his strongly believed investment principles, but also with his unique qualities of individual discipline, firmness, bravery, trust , stability, patience and other such traits. Taking him as a role model, many stock market investors could multiply their incomes and growth of wealth.