By Business Insider | Updated: Jan 11, 2017, 09.32 AM
Warren Buffett’s long-term approach has allowed Berkshire Hathaway’s book value to grow by a compounded 19.7% annually. Here are tips to be a successful investor in 2017.
QUALITY OVER QUANTITY
While Buffett prefers buying companies outright, he knows that some companies aren’t for sale. Buffett’s willing to own a partial interest in them. Investors must embrace quality-first mindset.
ACCEPT UNCERTAINTY
Though Buffett does his homework before he buys a stock, even he doesn’t know what’s going to happen. Stocks can be unpredictable and decisions will be based on assumptions.
CASH IS KING
Warren’s cash stockpile is legendary, and it protects him when markets sour, and gives him flexibility to take action when prices are right. Investors ought to keep some money in cash.
AVOID INACTION
Buffett doesn’t hesitate when he’s presented with an idea that hits the mark. He believes that taking action is critical to realising the potential of an opportunity. Having confidence to take action is important.
EYES ON THE PRIZE
Buffett concentrates on his investment discipline. A healthy cash position and a long-term mindset gives him the confidence to avoid chasing stocks higher.
PICK YOUR SPOT
Buffett is willing to pay a fair price to invest in great businesses. By considering the importance of entry point more than exit, he can control his risk.
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