Oh, Warren Buffett. If you haven’t heard of him, I am going to assume that you’ve either been living under a rock or are new to this whole finance thang. I first heard about our boy WB at my first job in finance. Another associate was discussing the current stock price of Mr. Buffett’s Berkshire Hathaway-A shares. The stock was trading at around $200,000 a pop at the time.
I immediately found myself wondering: who was Warren Buffett? I didn’t admit my ignorance to my colleagues and did some research. Let me save you time and tell you the highlights:
- He is frequently referred to as the Oracle of Omaha because he lives in Omaha, Nebraska. TBH even Buffett’s salary couldn’t get me to live in Nebraska.
- He is one of the most successful investors of all time. This dude started with $6,000 and 60 years later is worth around $80 billion. BILLION!
- He lives an extremely humble life. He has donated $27.54 billion to charity in just over ten years and he still lives in the same house he bought in 1957. He takes public transportation. He plays bridge with friends instead of throwing lavish parties.
- He loves Coca-Cola and drinks about five a day. That is so much sugar I don’t know how he’s still functioning.
How You Can Do The Buffett
One thing that has been tracked significantly with good results are his investing principles. He has notoriously only invested in a company if they pass a certain criteria. We can all take these same investment principles and utilize them on a smaller scale when we are doing our research about what to buy. Learn how to do the Buffett by following these rules:
a) Make sure the company is led by competent managers– did a company just hire a person who has run other businesses into the ground? Has the new CEO been at the head of a company who filed for bankruptcy? Does the CEO make racist or chauvinistic decisions when it comes to running the company? Is she/he just generally an idiot?
b) Make sure you understand the business – This is a main reason why I haven’t bought any Bitcoin or cryptocurrencies yet. I don’t get it. Until I do, I’m going to keep buying shares of McDonald’s and Disney stock because I love food and Mickey Mouse.
c) Make sure the long term prospects of the business are good – Remember Beanie Babies? Seemed like a great idea at the time and even my mom has an ample bag of perfectly preserved Beanie Babies in our attic. It was legit her get rich scheme; my mom did not Do The Buffett. Do yourself a favor and don’t invest in like fidget spinners or something crazy. Make sure what you’re investing in has a future for the long haul.
d) Get a quality company at a valuable price– Get something of high quality, which will probably go up in value over time, for cheap. The best way to break down this last principle is to compare it to finding an amazing antique or article of clothing at a vintage store for a cheap price that is really worth a lot more. If you buy stock of a great company for cheap, it will be worth more in the long run, so DO YOUR RESEARCH.
Fun Fact: Stockpile sells fractional shares of Berkshire Hathaway stock! If you want to grab a piece of Warren Buffett’s most notable company, click here.