Stock Market Lesson #1

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.

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