Warren Buffett is an 86-year-old American business magnate, investor, and philanthropist, known as a long-term value investor and the most successful investor of the 20th century. He is the CEO of Berkshire Hathaway and has a net worth of over $60 billion as of 2014. Buffett follows the value investing principles of his mentor Benjamin Graham, focusing on buying shares of high-quality companies trading at a discount to their intrinsic value. Some of Buffett's key investment strategies include maintaining a margin of safety when valuing companies, viewing the stock market as Mr. Market who occasionally offers irrational prices, and taking a long-term buy-and-hold approach to allow companies' intrinsic
Meaning of Term Structure of Interest Rates
Significance of Term Structure of Interest Rates
What is Yield Curve?
A spot rate and a forward Rate
Theories of Term Structure of Interest Rates
Meaning of Term Structure of Interest Rates
Significance of Term Structure of Interest Rates
What is Yield Curve?
A spot rate and a forward Rate
Theories of Term Structure of Interest Rates
The presentation explains that overall fundamental analysis in a company like economic, industry, and company analysis its gives a brief explanation about that.
Portfolio revision, securities, New securities, existing securities, purchases and sales of securities, maximizing the return, minimizing the risk, Transaction cost, Taxes, Statutory stipulations, Intrinsic difficulty, commission and brokerage, push up transaction costs, reducing the gains, constraint, Taxes, capital gains, long-term capital, lower rate, Frequent sales, short-term capital gains, investment companies, constraints, established, objectives, skill, resources and time, substantial adjustments, mispriced, excess returns, heterogeneous expectations, better estimates, generate excess returns, market efficiency, little incentive, predetermined rules, changes in the securities market, Performance measurement, Performance evaluation, superior or inferior, small investors, better performance, prompt liquidity, comparative performance, purchase and sale of securities.
For Videos use the links below
0 Course Introduction:: https://www.youtube.com/watch?v=9km4aXTus5c
1 Financial system and Environment : https://www.youtube.com/watch?v=BC2bAftm43c
2 Participants in a Financial System: https://www.youtube.com/watch?v=IEv_y7_aR7o
3 Functions of a Financial System: https://www.youtube.com/watch?v=T73-Dd8RM4I
4 Financial System and its components: https://www.youtube.com/watch?v=ovkAjEO8YAw
5 Efficiency of a financial system: https://www.youtube.com/watch?v=8xEUtvKYvPc
this slide will give you a brief idea about cash management and motives for holding cash...its very simple slide...you can easily understand the context with the help of pictures
Financial Markets - Money market-Organized and Unorganized-Sub markets
Capital market- Primary market-IPO-FPO- NFO, Book Building-Right Issue-Private placement- Bonus issue-Buyback
Secondary Market-Stock exchanges- Role and functions of Stock Exchanges- BSE-NSE.
Regulatory authorities and their functions – RBI, SEBI
An investor is a person who allocates capital with the expectation of a future financial return. Types of investment include : equity , debt securities , real estates, currency , and commodity , derivatives such as put and call options, etc,
investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.
The presentation explains that overall fundamental analysis in a company like economic, industry, and company analysis its gives a brief explanation about that.
Portfolio revision, securities, New securities, existing securities, purchases and sales of securities, maximizing the return, minimizing the risk, Transaction cost, Taxes, Statutory stipulations, Intrinsic difficulty, commission and brokerage, push up transaction costs, reducing the gains, constraint, Taxes, capital gains, long-term capital, lower rate, Frequent sales, short-term capital gains, investment companies, constraints, established, objectives, skill, resources and time, substantial adjustments, mispriced, excess returns, heterogeneous expectations, better estimates, generate excess returns, market efficiency, little incentive, predetermined rules, changes in the securities market, Performance measurement, Performance evaluation, superior or inferior, small investors, better performance, prompt liquidity, comparative performance, purchase and sale of securities.
For Videos use the links below
0 Course Introduction:: https://www.youtube.com/watch?v=9km4aXTus5c
1 Financial system and Environment : https://www.youtube.com/watch?v=BC2bAftm43c
2 Participants in a Financial System: https://www.youtube.com/watch?v=IEv_y7_aR7o
3 Functions of a Financial System: https://www.youtube.com/watch?v=T73-Dd8RM4I
4 Financial System and its components: https://www.youtube.com/watch?v=ovkAjEO8YAw
5 Efficiency of a financial system: https://www.youtube.com/watch?v=8xEUtvKYvPc
this slide will give you a brief idea about cash management and motives for holding cash...its very simple slide...you can easily understand the context with the help of pictures
Financial Markets - Money market-Organized and Unorganized-Sub markets
Capital market- Primary market-IPO-FPO- NFO, Book Building-Right Issue-Private placement- Bonus issue-Buyback
Secondary Market-Stock exchanges- Role and functions of Stock Exchanges- BSE-NSE.
Regulatory authorities and their functions – RBI, SEBI
An investor is a person who allocates capital with the expectation of a future financial return. Types of investment include : equity , debt securities , real estates, currency , and commodity , derivatives such as put and call options, etc,
investment strategies to grow your income. How much risk can you subject your investments to? How much can
you afford to lose in the near future? Remember that most forms of
investment have risk associated with them. Simply pick investment
instruments that match your risk tolerance.
Investment Strategy Case Analysis (MGT 3050)Afifah Nabilah
A case study of the J.D Williams Investment Strategy Problem. This is an assignment for IIUM students who took Decision Science (MGT 3050) in Semester 2, 2014/2015.
What are the different investment strategies that you can pick from and which one is right for you? Buy, rent and hold; Fix and Flip; Lease Options; Wholesaling
There are no schools on how to be a CTO of startup. CTO's of course are in charge of the development of product. But they are responsible for so much more than coding. This is a guide to help address often overlooked responsibilities.
Presented at DreamIT Ventures NYC Summer class '12.
Presentation describes most common responsibilities and their importance of a start-up CTO
- IT Strategy
- Product development
- Managing people and boards
Making an investment, especially in early-stage businesses and SMEs, can be a difficult and even stressful process. The spreadsheets. The financial projections. The five-year business plans. The valuation models.
All of these factors, while undoubtedly important, can overshadow what really matters when determining which businesses you should invest in: the management team, market size, potential to scale, and who else has invested.
We at Eureeca would like to help you learn how to cut to the heart of what’s important when investing so you can start making smart investment decisions today.
Questions to be addressed:
How should you navigate the investment process?
What should you look for when assessing an investment opportunity?
How does the Eureeca platform improve the investment process?
The Role of the CTO in a Growing OrganizationRoger Smith
The position of Chief Technology Officer is relatively new to corporate leadership and very little has been published on the role, responsibilities, and relationships of this position. Like many of the traditional leadership positions, the skills necessary to execute this position vary depending on the growth stage that the company is entering. In this paper we discuss the manner in which the role of the CTO changes as a company grows from a start-up to an industry dominating position.
Eric Ries' presentation on lean startups. From Steve Blank's Customer Development course at Berkeley. Learn more and hear the audio at http://bit.ly/3qsvJ.
Phil Ordway on Building Products Companies - Best Ideas 2016valueconferences
Opportunities in Building Products: Armstrong (NYSE: AWI) and USG (NYSE: USG) operate within a profitable niche market for ceiling products, and both are interesting companies. They have ~50% and ~30% market share, respectively, in a very stable, high-ROIC business with exemplary pricing power and relatively little competition. Using AWI’s numbers, volumes are still well below their 2005/06 peak and their plants are running at ~70% utilization, but they’ve been able to raise prices consistently and revenues and margins are considerably higher compared to the prior cyclical peak. This cycle may be a little different -- namely, it has been much slower to recover than many expected, and we may not attain those 2005/06 levels anytime soon -- but therein lies the potential opportunity, as some investors may have lost patience. AWI is also undergoing a period of significant change. Its smaller, less profitable flooring segment is likely to be spun off in 2016, and the remaining ceilings business will then be under the full control of a new CEO (who is the current president of that division and has achieved good results).
Important Lessons For Successful Investing.StockAxis
"Important Lessons for Successful Investing" is provided by StockAxis, one of the best investment advisory firms in India. This presentation contains information and tips on successful investing, including the importance of having a long-term investment strategy, understanding market cycles, diversification, risk management, and the significance of choosing high-quality companies for investment. The document also provides insights into some common mistakes made by investors and how to avoid them. Overall, this presentation serves as a useful guide for individuals who are interested in investing or seeking to enhance their investment knowledge.
Know More about our services:https://stockaxis.com/LP/Multibagger/OptionC/Index.aspx?source_google=ads&source_medium=searchsales&source_campaignid=04022023&source_campaignname=SSLPC
Fagnum is a new way to celebrate content marketing. Fagnum is a thriving content publishing and marketing platform to help the budding startups, bloggers, filmmakers, websites and content writers to help them grow and flourish.
http://www.fagnum.com
It is good to know the basics before making investments in Stock Markets. History has recorded scores of investors who have made fortune out of stock market. And if your investments are timed well, you could be the next fortune maker in the market.
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
The case study discusses the potential of drone delivery and the challenges that need to be addressed before it becomes widespread.
Key takeaways:
Drone delivery is in its early stages: Amazon's trial in the UK demonstrates the potential for faster deliveries, but it's still limited by regulations and technology.
Regulations are a major hurdle: Safety concerns around drone collisions with airplanes and people have led to restrictions on flight height and location.
Other challenges exist: Who will use drone delivery the most? Is it cost-effective compared to traditional delivery trucks?
Discussion questions:
Managerial challenges: Integrating drones requires planning for new infrastructure, training staff, and navigating regulations. There are also marketing and recruitment considerations specific to this technology.
External forces vary by country: Regulations, consumer acceptance, and infrastructure all differ between countries.
Demographics matter: Younger generations might be more receptive to drone delivery, while older populations might have concerns.
Stakeholders for Amazon: Customers, regulators, aviation authorities, and competitors are all stakeholders. Regulators likely hold the greatest influence as they determine the feasibility of drone delivery.
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...CIOWomenMagazine
This person is none other than Oprah Winfrey, a highly influential figure whose impact extends beyond television. This article will delve into the remarkable life and lasting legacy of Oprah. Her story serves as a reminder of the importance of perseverance, compassion, and firm determination.
The Team Member and Guest Experience - Lead and Take Care of your restaurant team. They are the people closest to and delivering Hospitality to your paying Guests!
Make the call, and we can assist you.
408-784-7371
Foodservice Consulting + Design
Senior Project and Engineering Leader Jim Smith.pdfJim Smith
I am a Project and Engineering Leader with extensive experience as a Business Operations Leader, Technical Project Manager, Engineering Manager and Operations Experience for Domestic and International companies such as Electrolux, Carrier, and Deutz. I have developed new products using Stage Gate development/MS Project/JIRA, for the pro-duction of Medical Equipment, Large Commercial Refrigeration Systems, Appliances, HVAC, and Diesel engines.
My experience includes:
Managed customized engineered refrigeration system projects with high voltage power panels from quote to ship, coordinating actions between electrical engineering, mechanical design and application engineering, purchasing, production, test, quality assurance and field installation. Managed projects $25k to $1M per project; 4-8 per month. (Hussmann refrigeration)
Successfully developed the $15-20M yearly corporate capital strategy for manufacturing, with the Executive Team and key stakeholders. Created project scope and specifications, business case, ROI, managed project plans with key personnel for nine consumer product manufacturing and distribution sites; to support the company’s strategic sales plan.
Over 15 years of experience managing and developing cost improvement projects with key Stakeholders, site Manufacturing Engineers, Mechanical Engineers, Maintenance, and facility support personnel to optimize pro-duction operations, safety, EHS, and new product development. (BioLab, Deutz, Caire)
Experience working as a Technical Manager developing new products with chemical engineers and packaging engineers to enhance and reduce the cost of retail products. I have led the activities of multiple engineering groups with diverse backgrounds.
Great experience managing the product development of products which utilize complex electrical controls, high voltage power panels, product testing, and commissioning.
Created project scope, business case, ROI for multiple capital projects to support electrotechnical assembly and CPG goods. Identified project cost, risk, success criteria, and performed equipment qualifications. (Carrier, Electrolux, Biolab, Price, Hussmann)
Created detailed projects plans using MS Project, Gant charts in excel, and updated new product development in Jira for stakeholders and project team members including critical path.
Great knowledge of ISO9001, NFPA, OSHA regulations.
User level knowledge of MRP/SAP, MS Project, Powerpoint, Visio, Mastercontrol, JIRA, Power BI and Tableau.
I appreciate your consideration, and look forward to discussing this role with you, and how I can lead your company’s growth and profitability. I can be contacted via LinkedIn via phone or E Mail.
Jim Smith
678-993-7195
jimsmith30024@gmail.com
3. 86 years old
An investment guru
No. 4 richest man in 2014 one of the
richest
Most successful stock market investors
for the past 30 years
CEO of Berkshire Hathaway – investing
in stocks and buying companies
Mentor : Benjamin Graham
(Father of value investing and Dean
Wall Street
Theory : “Mr Market” and “Margin of
Safety”
A mix approach investment from Ben
Graham and Philip Fisher
Source : Forbes 2014
WARREN BUFFET – “THE ORACLE OF OMAHA”
3
4. • Only buy stocks at a price that is well
below an intrinsic value of the business
– determined by assets, earnings,
dividends and future values
• Provides high-return opportunities but also
gives some protection on the downside if
things don't work out as planned
Principle No. 1:
Always Invest With a Margin of Safety
Principle No. 2:
Mr MARKET – Expect Volatily and Profit from It
Mr Market as a business partner who offers to buy or
sell you his interest daily. Price could be high or could
below and an investor you are free to buy his interest,
sell out to him or ignore if you don’t like the price. He will
always come back tomorrow with a different offer. Have
freedom to say no and think rationally.
BENJAMIN GRAHAM – FATHER OF VALUE INVESTING
4
5. Type of Investors
Defensive
Aggressive/Enterprise
Investors
Based on willingness and
ability to bear on the task
• Eg. Doctor – not able to spend too much
time to the process
• Focus on shares of companies that have
strong financial background and long term
profitable companies
• Eg. a sharp young executive interested in
finance)
• Expand their universe substantially, but
purchases should be attractively priced as
established by intelligent analysis
Understanding the
business and
economic conditions
Portfolio
diversification
• Highly believer in defensive investing and protecting a portfolio against errors
in judgment
• Recommends purchase of a minimum of 10 different issues and a maximum of
30. – Low risk, good return, buy and hold for long term
• Stock holdings should be reviewed at least annually, focus on dividend returns
and the operating results of the company, and ignore share price fluctuations
• Take advantage on the market fluctuation on the upside – stocks overvalued
• Have some understanding of business and economic conditions and will form
some opinion concerning the prospects of a firm or industry
• Use Historical data – historical rates provide a starting point, not representing
future but it gives some indicatives of future rates
• Use the proper historical rate requires considerable investment judgment
• Make decision based on quantitative than qualitative factors
BENJAMIN GRAHAM INVESTMENT PRINCIPLES
5
6. “I am 85% of Benjamin Graham”
“Risk comes from not knowing what you're doing”
-Warren Buffet-
Combo investment approach of Ben Graham and Philip Fisher
Rule No. 1: Never Lose Money, Rule No. 2 : Never Forget Rule No. 1
Be a sensible investor..
Don’t be frivolous
Don’t gamble
Don’t go into an investment with a cavalier attitude
Be informed on the companies’ operating results not by the short term fluctuations
Be patient and go for the value of business
Do your homework – if you know more about a company, why give more attention on
what market says?
Buy shares because you believe in the company – intend owning it for number of years
NEVER FOLLOW THE DAY TO DAY FLUCTUATIONS OF THE STOCK MARKET
ONLY check the market for anyone who sells a good business at a GREAT PRICE!
7. Don’t try and analyse or worry about the general economy
If the business does well, the stock eventually follows….
Impossible to predict the stock on daily basis
Impossible to forecast what the economy will do in the next 5 years
Don’t assume that that the direction comes from the economy predicted
Find a business that exhibit favourable for LONG TERM prospects – more VALUABLE
Does the company :-
Have a CONSISTENT operating profit?
Have a DOMINANT franchise?
Is the business generating HIGH and SUSTAINABLE profit margins?
A business that has ability to PROFIT in ANY economic environment is very VALUABLE!
7
8. It is better to buy a wonderful company at a fair price than a fair
company at a wonderful price
Buy a business NOT a stock
Buy QUALITY stocks and look for a company with..
Business operations that are UNDERSTOOD
FAVOURABLE long term business prospects
Operated by HONEST and COMPETENT people
Available at an ATTRACTIVE price
Assess companies based on :-
Business tenets – Simple and understandable business? Operating History? Profitable/Good Prospects?
Management tenets – Rational management? Honest with its shareholders?
Financial tenets – Return on equity not EPS, calculate owner earnings, search companies with high profit margins,
for every $1 of retained earnings, has the company created at least $1 worth of extra value?
Market tenets – Value of business? Right company at the right
price – with MoS against unknown risk?
8
9. Act like a owner of the business and NOT the owner of a piece of paper
Manage a portfolio of businesses
UNDERSTAND the company’s operating fundamentals
DIVERSIFICATION only required when the investor does not know what they are doing.
NOT MANY business owners are COMFORTABLE AND EXPERIENCED to operate a number of
companies portfolio at the same time.
Only BUY shares at the companies which are thoroughly UNDERSTOOD
“ Perfect timing is where, we simply attempt to be
fearful when others are greedy and to be greedy only
when others are fearful”
10. In the nutshell..
Buffet’s investment strategy is to locate wonderful
companies with long term value and fairly priced
stock. He understands the business that he is
comfortable with, and acts like a business owner
rather that a stock market speculator. He champions
the value investment strategy, maintains a longer
perspective at all times, and never loses sight of the
underlying value of a business.
10
Buffett is Chairman of Berkshire Hathaway (BRK.A) a holding company for a diverse set of businesses, which he developed from an unprofitable textile manufacturing operation. Berkshire Hathaway makes most of its profits from buying and owning entire companies. Buffett does hold these businesses indefinitely and makes very long-term plans for those companies that may encompass planning ahead 50 years or even more
Value investing is an approach that is widely used today by individual investors and portfolio managers
Intrinsic value is justified by a firm’s assets, earnings, dividends, and financial strength. Focusing on this value, he felt, would prevent an investor from being misled by the misjudgments often made by the market during periods of deep pessimism or euphoria
Philip Fisher investment approach is focused more on qualitative metrics – on companies with the ability to grow sales and profits over the years at rates greater than the industry average.
Intrinsic value- The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.
Concept of MoS is important - as value investing can provide substantial profits once the market inevitably re-evaluates the stock and raises its price to fair value. It also provides protection on the downside if things don’t work out as planned and the business falters. Graham believes that that identifying undervalued stocks, regardless of market sentiments was the key to stock market investment success.
2 Key approaches in buying shares:-
1.Buy for less than 2 thirds a company’s net asset value
2. Focus only on low price to earning ratio stocks
In other words, volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security's value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.
One measure of the relative volatility of a particular stock to the market is its beta. A beta approximates the overall volatility of a security's returns against the returns of a relevant benchmark
Mr Market
Mr. Market,” the imaginary business partner of each and every investor. Mr. Market offers investors a daily price quote at which he would either buy an investor out or sell his share of the business. Sometimes, he will be excited about the prospects for the business and quote a high price. Other times, he will be depressed about the business’s prospects and will quote a low price.
Because the stock market has these same emotions, the lesson here is that you shouldn’t let Mr. Market’s views dictate your own emotions or, worse, lead you in your investment decisions. Instead, you should form your own estimates of the business’s value based on a sound and rational examination of the facts. Furthermore, you should only buy when the price offered makes sense and sell when the price becomes too high. Put another way, the marketwill fluctuate–sometimes wildly–but rather than fearing volatility, use it to your advantage to get bargains in the market or to sell out when your holdings become way overvalued.
Type of Investors
Long term profitable companies here means –substantial size with a leading position in industry, which could be a company who holds a large pie or 2nd large pie in the market share of the industry.
Key rules for defensive investors:-
Adequate size: Exclude small companies with less than $100 million of annual sales for industrial companies and $50 million of total sales for public utilities. – with 5% annual growth rate i.e. public utility companies
• Strong financial condition: For industrial companies, current assets (cash, accounts receivable and inventory) should be at least twice current liabilities (short-term debt), and long-term debt should not exceed the net current assets (working capital, or current assets less current liabilities); for public utilities the debt should not exceed twice the stockholders’ equity (total assets less total liabilities).
• Earnings stability: Positive earnings for at least the last five years.
• Strong dividend record: Uninterrupted dividend payments for at least the past 20 years.
• Earnings growth: Minimum increase of at least one-third in earnings per share in the past 10 years (a 2.9% average annual growth rate over 10 years).
• Moderate price-to-earnings ratio: The current price should not be more than 15 times average earnings for the past three years.
• Moderate price-to-book-value ratio: The current price should not be more than 1½ times the last reported book value
Enterprise Investors
No restrictions; stocks of unpopular large companies and secondary companies (ones that are not leaders in a fairly important industry) considered particularly promising.
Be willing to buy something no one else wants, cheaply.Key rules when investing:-
Size: Select from a wider universe of stocks. • Financial condition: Current assets should be at least 1½ times current liabilities, and debt should not be more than 110% of net current assets. • Dividend record: Some level of dividend payments. • Price-to-book-value ratio: The price should be less than 120% of net tangible assets
Graham thought enterprising investors could also find success investing in secondary companies if purchased as bargains. A secondary company is defined by Graham as one that is a smaller concern in an important industry, or a top firm in an unimportant industry; many mid-sized listed companies. In general, Graham felt the stock market tends to undervalue these firms. At the same time, he believed these firms were large enough to sustain themselves through various economic environments, with the ability to earn a fair return on invested capital; investors would thus profit both from earnings paid in dividends and those that were reinvested. And in bull markets, he noted, the price of these firms often advances to full valuation.
Portfolio diversification
investors should take advantage of market fluctuations on the upside, when a stock becomes overvalued (or fairly valued for stocks that were purchased at below their intrinsic value); at these times, investors should sell and replace their holding with one that is more fairly valued or undervalued.
Price declines are a welcome way to add more shares to your portfolio. As long as you are investing in a soundly run business with good fundamentals, management and prices it will give good return
Philip Fisher use a qualitative metrics thru interviewing customers, competitors and consultants. He will always look for companies
That are dedicated to maintaining their competitive advantage and strengthening their market position.
That could grow without requiring additional equity financing. If a company expanded on the strength of its products and services rather than by
expanding its capital base, Fisher thought that predicted well for the future.
That have a great Mgt capabilities – good working relationships in a company
He believed in holding stock in a few outstanding companies than a large number of average companies.
Like fisher, Buffet is willing to invest in a small number of good companies, rather than diversify across a large no. of companies that he doesn’t understand as well.
Buffett looks not at the performance of a given stock, but at the performance of the underlying business. This is critical, because a strong underlying business means that an investment will almost always payoff, at least sooner or later.
The reason why most investors fail to follow Buffett’s advice in this regard is because it requires a lot more work. You actually have to research the individual companies, and have a keen understanding of their business and how well they are faring against the competition. Market sentiment of the company’s stock has little to do with it.
One of Buffett’s hallmark investment strategies is a investing in quality.
This means that he invests in companies that have well-known, well-regarded products that add value to the consumer and the economy. The companies he inverts money in are usually household names, which is to say that they have both strong market penetration and brand recognition.
Many less successful investors are drawn to companies and industries that they know little or nothing about. They assume that the less they know, the more likely it is that the investment will be a success, as though it will succeed based on some unexplained mystery factor. Quality – not mystery – makes a company a long-term winning investment.
He does this by buying companies that are selling at a discount to their real value. This strategy is more commonly referred to as value investing, which is the practice of buying stock in companies that are undervalued compared to other companies in their industry, as well as to the general market.
While many investment analysts tend to focus on a company’s numbers, market position, specific assets, and even public sentiment, Buffett looks more closely at management. Every one of those tangible metrics can change in the future, substantially weakening a company. But the caliber of management represents the future of the business. With the right people at the helm, the business will grow and prosper no matter what challenges it may face.
Buffet has this down to a science. He looks at the fundamentals of a company – it’s earnings, revenue, price-earnings ratio, return on equity and dividend yield, among other metrics – then he compares them to the same metrics in competing companies. If the company is generally strong compared to the competition, but the stock price is well below them, it becomes an investment candidate.
Be in the game for the Long Haul
When you look at the companies that Buffett either owns individually, or through Berkshire Hathaway, they’re all long-term investments. Buffett will buy stocks and hold onto them – not for years – but for decades. As long as the business is strong, the investment will payoff. Buffett’s track record, and the size of his portfolios, are testaments to the success of this strategy.