WARREN Buffett became one of the world’s richest people by adhering to simple doctrines.
Let’s learn from his simple living and savvy investing.
1. Be frugal
• Multi-billionaire Warren Buffet lives in a modest house.
• He has lived in the same humble house for the last 50 years.
• He does not have a driver to chauffer him around.
• And yes, he had an old car.
• His daughter was so embarrassed by his aged car that she prodded him into buying a new car.
• In case you are wondering, it’s a sedan, not a limousine.
• His motto: live simply. You’d have more funds to invest.
2. Resist the itch to constantly buy or sell stocks
• Have the patience to wait for expensive stocks to come down in price.
• Buy stock with cheap valuations and keep them.
• Have the patience to hold them for a long time.
3. Be a contrarian
• Go against the crowd. Be skeptical of conventional wisdom.
• Be fearful when others are greedy and be greedy when others are fearful.
• Buy when the public is extremely negative; be skeptical when the public is confident.
4. Stick with what you know
• If you don’t understand a company’s product or how it makes money, avoid it.
• Stay within your circle of confidence.
• During the 1990s boom, Buffett avoided tech firms because he did not understand what they did.
• He did not comprehend why they were valued so high.
• He may have seemed naïve… until the bubble burst.
5. Don’t depend on others to say you’re right
• You don’t need constant affirmation about your investment decisions from the stock market.
• You don’t watch TV or the internet telling you every week that you made the right choice.
• Buffett buys disliked value stocks that are ignored and beaten down to low valuation.
(Read next week’s edition of Asian Journal for Part 2)
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at email@example.com.