| Rath said: Warren Buffett, his dealing is either absurdly lucky or he is actually properly a financial genius. |
I think it's less luck... then it is the fact that he removes luck from the equation.
His style is often studied and rarely replicated... it's actually pretty simple.
1) He ignores the stock market.
Seriously. he basically ignores what a stock is doing, and just looks at one thing. "Can this company make money, and will it make money... and how much will it make in relation to the price i can buy shares at."
He basically assumes that over time a stocks price will reflect the profitablilty of a company... and he can afford to wait... assuming the company is healthy and makes descisions that prevent it from closing down. (another thing he checks.)
Most people like to play the market short term... or at least, pay attention to the market. If company A's stock is rising, and B's isn't... even if B runs a better ship, people assume A is doing better.
2) Always have money in hand.
This is a big no no for most people, as most people see money uninvested as money not making them money. Warren Buffet see's money on hand as an investment in the unknown. With money on hand, he can pounce on deals before anyone else can.
3) Unuqueness.
Warren Buffet actually cares what his companies produce. Not just the stock value they'll give him, he wants to only invest in unique distinguishable companies.
