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How's it going today, guys? So, today what we're going to be talking about is um some tips on how you can invest like Warren Buffett. Now, Warren Buffett is one of the most successful investors of all time. And uh I think right now his net worth is over $70 billion as of 2017. So, the guy has quite a lot of accomplishments under his belt.
and um he has a lot of good tips for people looking to get into investing. And um a lot of people when they look at investing, what they're looking for is like a short-term capital gain. They're looking to make quick money. And that's why there's a lot of like a lure and um a lot of people who look at those penny stocks and like really cheap stocks.
And what they want to do is they want to buy something really cheap and even if it's a gamble, they want that thing to pay off on like, you know, 10x or 20x scale where they're making 20 times their money back. And that's kind of like the exact opposite strategy that Warren Buffett has where he is more about um buying stocks and companies that you want to hold for a duration of time and having that slow but steady growth over time.
So um it's definitely something to consider and I definitely do some of these things with my own investing and in my own portfolio and I'll mention those to you guys as I go here. But um I mean I have six pointers. I'm going to have to do it half and half cuz I can't fit it all on the board. So, first here I got the first three pointers on how to invest like Warren Buffett.
And uh before I get into the video, I just wanted to mention as well if anybody's interested in my own personal stock market trading strategy, I just wrapped up my ebook I've been working on for the last couple of months and I will link that up in the description if anybody's interested in that. Okay, so the first step or the first tip to invest like Warren Buffett is to invest in the everyday essentials.
So, Birksher Hathaway, which is owned by Warren Buffett, has holdings in the simple areas that run our economy. A couple of examples of these would be insurance companies, utilities, um, energy companies, railroads, retail, manufacturing, and finance. So, like I said, a couple of these strategies I actually do myself, and one of these is having investments in utilities and energy.
Um, I have a good amount invested in a uh my area's local utility company that does all the power lines um as well as the electricity and the gas for my area. So, I do have investments in utilities and that has been a pretty good dividend stock for me. So, it doesn't really grow much um year to year.
It has that slow but steady growth, but it's actually a pretty good dividend stock. So, I get a nice little dividend from that stock there. Um there's a quote that he said which is if you use it all the time you might want a slice of it. So that's a good way to think about it. If it's something that you're using day in and day out and you see everyone around you using this and you don't see it going anywhere anytime soon that might be something good to invest in.
Um so Birksher Hathaway has holdings in Geico which falls under the insurance category, Duracell which is under the energy category and Wells Fargo which is under that finance category. So the second way you can invest like Warren Buffett is to trust your gut. So Buffett always invests in companies he trusts.
And um in determining if he trusts a company or not, he looked at a number of different factors. Uh this includes the reputation of the company, the public behavior. So how the company is acting with its public outreach, how it acts um in the press and when it's addressing the public. um accountability of management um as well as how the company treats every person involved in the process from executives to employees to the communities and even the environment which is really important because there's a lot of companies out there um not so much now but maybe back in the time when Warren Buffett was really investing heavily in companies that were not very responsible with the environment and this was something that he considered as a factor of whether or not he would invest in that company early on which is really good because in a way that made him ahead of his time looking into that because now um if there was a company out there that was being very that had very bad environmental habits um there'd be a lot of negative press about that because people are more conscious about the environment now which is good.
So the third step or the third tip on how you can invest like Warren Buffett is to ignore the news. And um this is something I've heard from a lot of different people and um it's hard to remember off the top of my head where I read this, but cuz I've read so many different books on investing in the stock market.
They all kind of just blend together and I'll remember little different tidbits, but I won't remember who actually wrote this or who wrote the actual thing that I'm trying to remember. But what they said was um you should uh you shouldn't buy the news, you should instead buy the reaction to the news.
So that's another pointer under ignore the news. But um what Warren Buffett says is that no long-term good can come from reacting to today's economic news. And he has a rule that he said has made him a lot of money in the past. That rule is the government will always act to stabilize the economy. And this is where the opportunities lay.
So just for an example, you could look at the bailout of the automotive industry. That was a way that the government stepped in and stabilized the economy. So um if you are receptive enough to pick up on things like this um there are tremendous opportunities in the fact of the government um supporting certain companies or doing things to stabilize the economy and kind of return things to normal.
Um and then what he says as well is to think ahead of the news. So you don't want to be trading the news itself. You don't want to be following the herd. you want to be a couple steps ahead and seeing how people are going to react to it and um maybe seeing if um there's anything that's happening that would involve the government stepping in to act to stabilize things.
So those are the first three pointers on how to invest like Warren Buffett. Okay, so here are the other pointers on how to invest like Warren Buffett. And um I know I said in the beginning I believe I said I had six pointers. I don't know where I got that number from. I actually have eight. So here are the remaining um what is this the remaining five here we covered the first three already.
So the next tip on how to invest like Warren Buffett is to study a company's return on assets. Um and what this means is you want to find out how much money the company makes with the assets that it owns. And what you're looking for is a consistent 20% return on investment each year. um in his opinion this meant that the company was responsible with the uh purchasing of assets and they were making smart investments themselves.
So that was a sign for him that this was a company he wanted to invest in. He also said examined trend lines and he gave an example of this as well of a company breaking a trend line. He said for example let's say you saw a company that was making a 10% return on return return on investment with its assets suddenly making a 20% return on investment with its assets.
He said those are the kind of things you want to look for. You want to look for deviations from the trend lines and study these things so you can identify when um maybe a company is making more money on its assets than it was in the past couple of years. That's something you want to look for. Number five would be to observe from the sideline.
Um he suggests building a watch list of companies and then studying or watching the stock price over time. He also suggests studying how well the company makes money. And this ties into studying a company's return on assets. Um he says that you should look for a company consistently making money where the stock may be out of whack.
So if you were looking and you found a company that was consistently making money but the stock price wasn't reflecting that, that might be an opportunity. He says, um the next thing we kind of touched on this in the beginning. Um Warren Buffett is all about long-term investment. He's not he's not about investing in hype or investing in something that's going to give you or two or three times return on your investment in a short period of time.
He's more about buying things that are more stable um the everyday essentials and holding on to these things for a great duration of time because that's where the that's where the potential really lays is where you buy and you hold the stock. So Warren Buffett recommends that when you buy a stock you're considering it to be an investment of a 5-year minimum.
So that's about how long you should be expecting to hold on to that company. So he's not um really supporting or he doesn't really do himself any short-term investing. So that's one way that you know you you hear some people that do short-term trading, others are more long-term. I kind of do a blend of both, but he is all about the long-term investing.
Um and then his seventh tip here that I had was to buy index funds. So he basically says cuz all of this stuff, all these previous steps, it takes a lot of work. You have to be very patient and you have to um really know where to look and you have to do a lot of digging in order to come across these um gold mines that he's talking about here where you're looking for certain things in a company.
Um so they don't just jump out at you. You kind of have to go digging and you have to really care about the um the fundamentals of a company. So, he says if you're an investor who doesn't have the time to do all that, if you don't have the time to be doing all these previous steps, he suggests buying index funds.
Um, because that gets you some exposure to the whole industry and you're not necessarily having all of your eggs in one basket where one company may do poorly, but the but the industry as a whole does well. This gets you basically a piece of the action of that index or industry um while staying diversified.
So, he suggests buying index funds if you don't have the time to do all of this other stuff here. And then number eight is to give back. Um, Warren Buffett is like one of the most charitable people that I've ever really come across. Uh, I mean, some people may have donated more than him collectively, but um, I wrote it in the description.
I don't remember off the top of my head, but I believe it was 25 billion. That's how much Warren Buffett has given to charities in his lifetime. And I believe his will is structured such that he's giving away like 99% of his wealth to charity when he passes away. So he is like the epitome of this giving back.
So that's why he actually includes that as part of his investment strategy is when you're following these strategies or whatever strategy you follow and when you're starting to make money, you need to continue to give back to others who u maybe don't have as much as you have. So, um I was really glad that the um a couple of the resources I read, they all kind of mentioned this as part of his strategy.
So, I wanted to bring that up as well because he really is a very charitable person and it's uh something to admire. But that's pretty much um the investment strategy of Warren Buffett. And if you follow these steps, you can invest more like Warren Buffett. And um I'm going to do more of these kind of like I guess you could call this like a profile.
also looking at people who've made a lot of money in the stock market and kind of outlining their strategy. So, I have a couple on the top of my head of uh people that I want to study and maybe do a video like this. But, if you guys have any recommendations of um it really can be anybody who um you want me to study, how they made money, um some of their tips, some ways you can invest or be more like them.
Uh I think it would be really cool because um I feel like everybody has lessons to teach and uh you can learn something different from every single person. So, if there's anybody you want me to do a profile of, uh, please drop it in the comments below and I'll try to include that in a future video. But, like I said in the beginning, um, if you guys are interested at all in my individual stock market trading strategy, um, I just wrapped up my ebook about a month and a half ago and, uh, I've had a couple of people actually already reading it and they're already trading and a couple people have already even messaged me saying that they're already making a profit with my strategy.
So, that's really cool. That's pretty much all I got for this video. I hope this information was helpful to you. If it was, please drop a like and uh if you want to be notified of future uploads, please subscribe.
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