Sunday, 7 June 2015

Buffett's Investment Model is the Key

Warren Buffett has made the business of investment a real simple one. He does this with an investment model that serves him well, both as an investor and a businessman by focusing on;

  • his circle of competence
  • capital allocation
  • not paying a dividend (preventing corporate leaking)
  • the strength of company's economic castle and moat
  • copycat any investment practice that is worthy
  • avoid the commission of investment mistakes

Buffett buys a business outright or a piece of the business and he gives it to someone else to do the heavy-lifting and remit the profit to him for future deployment.

His value investing foundation marks the principle of selecting where Buffett's capital goes and this is supported by serious consideration for those businesses that possess a strong economic moat around them to protect the economic castle's cash flow and profit.

There is no way you can escape making mistakes, but if you avoid those risk that are obvious risk and the level of uncertainty is high you will do better.

Focus InSight: Keep it real simple and protect what you have invested in beit time or money.

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