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Assignment-Warren Buffet - YWAN ELAINA JOY V.

The document outlines 6 rules of investing according to Warren Buffett: 1) Cash is not a good investment, 2) Invest in productive assets, 3) Stay within your circle of competence, 4) Evaluate companies based on value investing principles, 5) Play big and don't waste opportunities, 6) Invest in yourself by strengthening communication, leadership skills, and business connections.

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11 views3 pages

Assignment-Warren Buffet - YWAN ELAINA JOY V.

The document outlines 6 rules of investing according to Warren Buffett: 1) Cash is not a good investment, 2) Invest in productive assets, 3) Stay within your circle of competence, 4) Evaluate companies based on value investing principles, 5) Play big and don't waste opportunities, 6) Invest in yourself by strengthening communication, leadership skills, and business connections.

Uploaded by

Elaina Joy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Warren Buffett is widely regarded as one of the most successful investors of all

time and Berkshire Hathaway is run by Warren Buffett. Based on the video, there are 6
rules of investing that Warren buffet gives.

Based on my understanding in the video, The first rule is Cash is not A Good
investment since we must get out of the cash and get into the assets. Cash is not
producing anything and it is sure to go down in value over time since the prices of the
goods increase. To make sure to have enough cash or money, that cash might open up
opportunities for future investments. Several times throughout history, the value of cash
has surpassed the value of equities. So, if you have liquid cash in your pocket, you can
take advantage of strong stock market opportunities when they arise, rather than settle
for only the cash that will not provide the gains you expect. The Second rule is to
invest in productive assets, If you are going to invest, always put your money into
creating assets. The assets that will make profits for you instead of merely hanging.
Similarly to gold, we must not merely invest in it even if the gold price or value is now
growing. We've all heard that gold beat stocks in the prior year. When doing a
comparative return analysis, we should always look at historical average returns. So,
instead of investing in gold, we should invest in productive assets that will grow over
time and offer you comparable returns.

The third rule is to Stay in your circle of competence. This is an important


aspect of investing since it doesn't matter how big your circle is or how knowledgeable
you are about everything; we just need to stay within it. Because understanding our
circle of competence helps us avoid difficulties or hazards. This is accomplished
through identifying areas for improvement or by learning from others. This allows
investors to concentrate their efforts solely on their areas of expertise. Investors must
be able to adequately assess chosen organizations. The Fourth rule is to Evaluate a
company first because the stock-picking strategy must begin with an examination of a
firm based on the value investing principle. We need to look for companies that have a
high return on equity over a lengthy period, particularly when compared to competitors
in the same industry.

The Fifth rule is to Play big and don’t waste opportunities. If we are allowed
to do something significant in our lives, we must take it. We must recognize all of the
amazing opportunities and wait for the right time to take advantage of them. Real
money cannot be made by investing in equities at random as their prices rise. We
should think about a significant investment decision for a long time before making it. We
will become affluent if we make a few substantial, well-thought-out investments
throughout the course of our lifetimes. The Sixth rule is Investing in yourself because
this is the most effective approach to live a successful life. This is the most important
principle since no one can take away what we have invested in ourselves in terms of
talent or skills. Making improvements to oneself is the best method to make a wise
investment decision. There are three ways to do it:

● Invest in strengthening your communication abilities - You could have all the
brainpower in the world, but you must be able to communicate it. And
communication is the act of transmitting.
● Invest in enhancing your leadership skills - One of the most important non-
negotiable attributes that leaders must have is honesty. because when we recruit
individuals We look for intellect, initiative, or enthusiasm, as well as honesty. And
if they lack the latter, the first two will crush you, so if you're going to acquire
somebody without integrity, you would like them to be lazy and foolish.
● Invest in developing your business connections - Surrounding yourself with the
proper people, that is, individuals who share your aspirations, objectives, and
ambitions, is one of the keys to success.
Resources:

https://www.youtube.com/watch?v=DlA2jMueIyc&t=66s

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