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Monday, April 20, 2009

Warren Buffet Strategy 1

By Mara Hernandez-Capili

Warren Buffet is Americas most famous investor. Any investor, especially those who are looking to be experts into trading stocks are looking up to him as a role model. He was idolized by many because of his investing strategies that people tend to emulate. He was the godfather of investing. He was also famous for his frugal living despite the fact that his company is worth to $69 billion dollars.

This piece is written to provide you with some insights on the famous investors strategy. The methods are actually simple questions that you need to ask yourself before plunging into a stock trading. First question is Is this business simple and understandable? It is easier for an investor to invest in a company that he is knowledgeable of in order to effectively forecast problems or growth events should they arise.

Second is to ask yourself: Does the company have a consistent operations history? By researching more on the operations management of the company since the time it was conceived you will have a clear view on the operating history of the company and thus be able to forecast future trends. Third is to ask: Does the company have favorable long-term prospects? A wise investor would research on the future plans of the company as it contains the true value of the investment.

Fourth is to ask Is the management rational? This tackles the importance of evaluating the company by looking into its company values, vision, mission, etc. It is also advisable to look on some operations procedure especially that which relates to money like where do the company allocate excess profits, etc.

The fifth question is to ask: Is the company candid with its shareholders? It is important to have a good working relationship and open communication for your partners. - 23196

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