Category archives: Warren Buffett Explained

Are You Willing To Hold An Investment For 10 Years, As Buffett Suggests?

Last update on Feb. 8, 2015.

 10 Euro Bill

 

"Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years." - Warren Buffett

When I read the above quote for the first time, I was a novice investor and I couldn't wrap my head around it. Back then, I thought value investing was about investing in companies with low Price to Earnings ratios and/or companies with low Price to Book ratios. I noticed that these ratios moved up and down a lot, which meant that stocks that looked like "value stocks" one year did not fit the description the ...

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How Warren Buffett Picks Stocks

Last update on Oct. 27, 2014.

 High jump

 

I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. - Warren Buffett

When I first read the above quote, I was pretty new to investing. So when I read it, it didn't make any sense to me.

Warren Buffett is widely regarded as the most sophisticated investor alive. He has expertise in accounting, finance, economics, regulation, as well as intimate knowledge of many industries. By all accounts, he uses his knowledge in all of these areas before he makes a single purchase of stock. So how can ...

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How Warren Buffett Defines Risk

Last update on Aug. 28, 2014.

 Risk

 

Risk comes from not knowing what you're doing. - Warren Buffett

 

If you mention Buffett's quote above to most people, you'll likely get a nod that says "oooh, that's deep". But if you ask them what they think it means, you will likely get confused stares.

In this article, I will explain what Buffett means when he says risk comes from ignorance. In fact, this quote reveals the way we see risk, and how he sees it differently from how many other people see risk.

 

Shortcomings Of The Traditional Measure Of Risk

As ...

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Warren Buffett's #1 Rule Of Investing

Last update on Aug. 18, 2014.

Warren Buffett

 

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. - Warren Buffett

If you took a poll of serious investors and asked them who they thought was the savviest investor alive, Warren Buffett would probably come out on top. In fact, he would probably poll as the savviest investor of all time.

In this series, I will explain some of Buffett's most famous quotes. Although Buffett does a fantastic job of expressing his opinions in terms of everyday language, I still struggled in my earlier years to understand exactly what he meant. Understanding his ...

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