Warren Buffett is the CEO of Berkshire Hathaway and one of the greatest investors of all time. This article presents some of his methods and the financial indicators he uses when trading stocks. But before moving along, these are some ground rules of the legendary investor.
Warren Buffett’s Ground Rules
- 70/30 Rule (Invest 70% of your money and save 30%)
- Investing requires long-term thinking -Buy only something that you'd be perfectly happy to hold for 10 years
- Don’t try to predict the market -Uncertainty is the friend of the buyer of long-term values
- Focus on the "Deep Value" of businesses and have something to compare it against -Price is what you pay; value is what you get
- Good investment is based on the industry’s prospects and the ability of the management to exploit future opportunities
- Pay attention to the corporate earnings yield and compare it to the bonds yield -Wait for the stock price to reach the desired level of a long-term rate of return
Read more: Warren Buffett Stock Trading Method and Financial Indicators