Understanding a business before you invest is one of the Berkshire Hathaway founder Buffett’s famous pieces of advice.
Buffett argues people can’t predict the future with 100 percent accuracy and should therefore avoid situations that rely on a precise forecast. Winfrey took that advice to heart by putting her money into something she used and grasped.
Oprah Winfrey made a name for herself when she borrowed a lesson from Warren Buffett’s playbook, and it paid off.
She is giving advice to millions of people through her media empire.
Invest in what you know…and nothing more.One of the easiest ways to make an avoidable mistake is getting involved in investments that are overly complex.
Many of us have spent our entire careers working in no more than a handful of different industries.
Winfrey spent $43 million on Weight Watchers stock in October 2015, and since then, the price has soared from $7 a share to $101. That added $427 million to Winfrey’s $4 billion fortune. She reportedly tried the diet company’s new food plan herself and then backed the business with her personal brand by joining the board .
It’s been proven time and time again that long-term investing outperforms short-term investing, yet many investors still focus too little attention on the resiliency of the Africa economy and too much attention on the day-to-day profit and loss of their investments.
“Never invest in a business you cannot understand.” – Warren Buffett.
As long-term investors, we need to heed Warren Buffett’s investment advice to buy quality when it is marked down in price.Winfrey said”
Investing in the stock market is not a path to get rich quickly.
If anything, I believe the stock market is best meant to moderately grow our existing capital over long periods of time. Investing is not meant to be exciting, and dividend growth investing in particular is a conservative strategy.
Rather than try to find the next major winner in an emerging industry, it is often better to invest in companies that have already proven their worth.
Becareful when selecting your business partners, Warren Buffett is very careful when it comes to selecting his business partners and managers. Their actions can make or break an investment for many years to come.
Warren Buffett follows a simple approach rooted in common sense.
By embracing some of Warren Buffett’s investment advice – focusing on the longer term, sticking to blue-chip dividend stocks, remaining within our circle of competence – we can better manage our portfolios to reduce the number of costly errors we make and continuously move closer to achieving our goals.
Warren Buffett clearly embraces a buy-and-hold mentality. He has held some of his positions for a number of decades.
Why? For one thing, it’s hard to find excellent businesses that continue to have a bright long-term future (Buffett runs a concentrated portfolio for this reason).
Furthermore, quality businesses earn high returns and increase in value over time. Just like Warren Buffett said, time is the friend of the wonderful business. Fundamentals can take years to impact a stock’s price, and only patient investors are rewarded.