Warren Buffet Investment Style - Invest Where You Spend
By Sandy Naidu | July 2, 2008
Most of us have heard of Warren Buffet - he is one of the richest men in the world. His company, Berkshire Hathaway Inc, has made its shareholders multi millionaires. It is Buffet’s investment style that has made this possible.
Many books have been written about Buffet’s investment style and his methodology in picking stocks for his company.
In this post I am going to write about one of his most talked about investment rule…That is -
‘Invest In What You Know’.
He believes that one should not invest in a company whose business one does not understand. His company holds huge chunk of shares in American Express Company, The Coca-Cola Company, Federal Home Loan Mortgage Corporation, The Gillette Company, The Washington Post Company and Wells Fargo & Company.
What does this tell you - he is investing in companies that have products which you and I use. Basically these are the companies whose products we buy almost on a daily basis.
‘Invest Where You Spend’. If you bank with ANZ then why not buy some ANZ shares…If you do your grocery shopping at Woolies buy some of their shares…These companies are house hold names. A lot of people depend on their products.
Sounds simple but it also make sense. Let me know what you think…
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