Liz Claman’s collection of investment advice from Warren Buffet, Jim Cramer, Suzie Orman, Steve Forbes and many other well-qualified investors contains valuable information for investors.
Warren Buffet’s 3 principles of investing include :
1) Look at a stock as being part of a business vs something that has a lot of flash about it or what your broker or neighbour tells you about it. Assess the intrinsic value of the business. You can look into the company reports and filings that the Securities and Exchange Commission requires. Find out the following :
A) Does it have cash flow?
B) What are its long term prospects?
C) Are earning reports relatively consistent?
D) Does it have a solid consistent operating history?
E) Does it have a high profit margin?
2) The second principle involes the investor’s attitude toward stock and market fluctiuations. He believes that investors should turn a deaf ear to the day-to-day gyrations of the stock market.
3) The third principle involves the margin of safety. Investors should find properties where there is a wide discrepancy, and if you can buy them at 2/3 of what they are worth, then do it.