Dividends4Life: Words Of Wisdom From Warren Buffett

Words Of Wisdom From Warren Buffett

Posted by D4L | Friday, October 14, 2011 | | 0 comments »

In the short run, the market is often called a voting machine. In the long run, it should function more like a weighing machine. Votes may count in the short term, but a weighing machine looks at a company’s intrinsic value and long-term earnings potential. Especially in the current, volatile market climate, it’s important to correctly price stocks, which is something entirely different than trying to predict their course of action during the next month or next year. Valuing is not the same as predicting. Warren Buffett only wants companies that are already succeeding, companies that have been tested in the real world. Good balance sheets and an attractive entry price. He likes what he considers to be a sure thing.

We have all heard the line: “Never fix a problem that doesn’t need fixing.” Warren Buffett doesn’t trade in the typical sense; he looks for opportunities, and when he finally pulls the trigger, he always gives his investments time to work out. The key is always to try to get the initial investment right. If you don’t get the initial investment right, you always have a problem down the road. If you can get it right, and Buffett and Munger are very good at that, then time will give you the expected profits.

Source: Seeking Alpha

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