Tuesday, February 25, 2014

'I had a farm in Omaha': Warren Buffett dishes out investment advice - The Tell - MarketWatch

'I had a farm in Omaha': Warren Buffett dishes out investment advice - The Tell - MarketWatch:

Here are the five lessons he says the average investor can learn from these two simple investments:



You don’t have to be an expert to achieve satisfactory investment returns. Recognize your limitations, keep things simple and “don’t swing for the fences.” Don’t believe in or look for a quick profit.

Focus on the future productivity of the assets you are considering. Unless you can make a rough estimate of its future earnings, move on. You can’t evaluate everything, but you have to understand the actions you’re going take.

Avoid speculation, such as focusing on the prospective price change of an asset. “Half of all coin-flippers will win their first toss; none of those winners has an expectation of profit if he continues to play the game,” says the Sage.

Think about what that asset will produce, not about daily valuations. “Games are won by players who focus on the playing field — not by those whose eyes to the scoreboard,” says Buffett.

“Forming macro opinions or listening to the macro or market predictions of others is a waste of time” and even “dangerous, because it may blur your vision of the facts that are truly important,” he says.

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