Warren Buffett stock basics:
One of the most well known and best
Investor our generation is Warren Buffett. But what makes him that
great and what´s his secret to success in the stockmarket.
Warren Buffett has 4 rules for a good
stock.
His first rule is „ A stock must
be stable and understandable“.
If a company is stable it makes it easier to understand.
The
second rule is to look for stocks have long term prospects.
This
means you should look for a company in a sector with huge development
and emerging potential. Warren Buffett looks at a company and tries
to evaluate if this company could still be successful in 30-40 years.
This is very improtant for a investing or trading strategy like
Buffets because when he buys a company he holds the stock.
An
important aspect in his stock evaluation is his third rule which is
harder to analyse for a smaller investor. A stock must be
managed by vigilant leaders.
The
management has to manage dept really well. Therefore Warren Buffett
stays away from companys that are in a lot of dept.
His
last but very important rule is that a stock has to be „undervalued“.
Warren
Buffett only considers a stock if it fulfilles every aspect.
Hope
you learned a little bit today.
In
our next lesson I will show you how to evaluate a stock and find
undervalued companys.
RvL
Capital
