As a savvy investor I looked for investing role models, and who better than The Sage of Omaha, Warren Buffett. Here are some famous quotes from the man himself. I used them to shape my portfolio.
Warren Buffett says invest for the long term!
“Our favourite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint”.
From the above quote, I learnt about buying and holding for the long term. There are many investors and strategies that are all about making a quick profit. This includes flipping stocks and shares when they may be up and down. I’ve adopted the approach of choosing quality stocks to own for a long time.
Taking advantage of price dips, like now!
Warren Buffett said, “When we’re talking about socks or stocks, I like buying quality merchandise when it is marked down”.
I learnt that when a stock I have on my buy list dips in price, there is an opportunity to buy shares, or buy more shares in a stock I already own, at a cut price. I would expect the share price to bounce back, providing me with capital returns too. A perfect example of this is the current economic volatility. I have scoured the FTSE for many UK shares that I believe are marked down currently. Presently, the stock market is struggling against the backdrop of soaring inflation and geopolitical issues.
Research, read, think!
“The best way to think about investment is to be in a room with no one else and to just think. If that doesn’t work, nothing else is going to work”.
It is said that Warren Buffett spends approximately 80% of his day reading and thinking. What I took from this is a core part of my investment mantra. I do as much research and due diligence as possible before buying a stock. I must confess this is one of my favourite lessons and I do admit to making mistakes in my early days due to a lack of research.
Expertise
“The important thing is to know what you know and know what you don’t know”.
This particular quote hits home with me personally. Warren Buffett has publicly admitted in the past he has passed up the opportunity to invest in quality companies because he did not understand them.
I don’t profess to be an expert in any given field. However, I do have a decent understanding of technology, and property. I’ve tried to keep my portfolio diverse, and only purchased stocks I know enough about, including the sector they operate in. I own a number of tech stocks, such as Sage Group, as well as real estate investment trusts (REITs), such as Warehouse REIT.
To summarise, these, and many more, of Warren Buffet’s lessons have helped me shape my holdings.