📈 Investment Lessons from Warren Buffett

🧠 Core Principles

  • Make a few smart decisions rather than 100 average ones.
  • Don’t chase patterns—they rarely repeat exactly.
  • You only need 2-3 successful businesses to build wealth.
  • Focus on business understanding, not market trends.

📚 Reading & Research

  • Spend more time reading annual reports, industry articles, and business news.
  • Know the company through its customers, competitors, and former employees.
  • Buffett follows Ben Graham (value investing) and Phil Fisher (business quality).

💸 Financial Discipline

The Oracle of Omaha

The Oracle of Omaha

  • Buy companies with low P/E ratios—high P/E may mean overpricing.
  • A dividend-paying company should ideally have zero debt.
  • CEO compensation much higher than peers is a red flag.
  • Keep a pile of cash for unexpected opportunities.
  • Invest only when the business is available at a discount to intrinsic value.
  • Buybacks are a good signal—if a company buys back its shares, consider buying.

🏢 What Buffett Looks for in a Business

  • Simple and understandable business.
  • Consistent operational history.
  • Favorable long-term prospects.
  • Generates cash in excess of its needs.
  • Trustworthy founders or CEOs are a plus.

🧮 Margin of Safety & Intrinsic Value

  • The intrinsic value is what the stock is really worth.
  • Always invest with a margin of safety—buy below intrinsic value.
  • Buying businesses at low prices is the foundation of value investing.

📊 Portfolio & Allocation Strategy

  • It’s better to invest 80% in a few great companies and 20% in others.
  • Phil Fisher held less than 10 companies, with 75% in 3–4 of them.
  • Quarterly performance is not a good indicator of long-term success.

🧠 Wisdom from Charlie Munger

  • Look through metrics like ROE (Return on Equity) and Margin of Safety.
  • Stay rational—most investors are trapped by fear and greed.

⚠️ Common Pitfalls to Avoid

  • Don’t follow market fads.
  • Don’t speculate about interest rates or macroeconomics.
  • Don’t let emotion override business logic.

📘 Final Thought

Ask yourself: “Has anybody done something foolish that gives me the opportunity to buy a great business at a great price?”That’s the Buffett mindset—buy great companies, understand them deeply, and wait patiently with discipline and courage.