I recently read two great books on investments. One from a billionaire everyone knows, Warren Buffett, titled “Essays of Warren Buffett” and the other from rising economist Peter Schiff titled “The Little Book of Bull Moves in Bear Markets“.
Both of these investors are fairly conservative (depending on your views). I’ll go through what I learned from each of them separately and then present a case on how to combine both schools of thought to succeed in the markets.
Highlights from the Warren Buffett Essay’s
- Before investing in a stock know that you are about to become the owner and treat your decision that way.
- Look at management inside a company. It is far more important then any type of computer generated trend.
- Only invest in 2 or 3 businesses that you consider great (don’t diversify too much).
- “Put all your eggs in one basket…and watch it”
- Only invest in businesses and people you trust.
- Invest in companies that deliver consistent results.
- Make sure management “think like owners” and exude integrity and ability.
- Do not invest without doing heavy, consistent research.
- Invest only in businesses that you understand.
Highlights from Bull Moves in Bear Markets
- America is not a good place to invest in.
- The American government has been overspending and raising taxes the past 20 years, making it a bad investing environment.
- Invest in commodities.
- Invest in Gold and Silver.
- Invest in foreign countries that are growing (Brazil, Russia, India, and China).
- Don’t invest in factories overseas that only work with the United States because they will suffer over the years.
- Invest in foreign companies that have domestic appeal, meaning their people love them.
- Save money but don’t sit on it too long, invest it in foreign countries.
- The American economy consumes way more then it produces.
- The American economy will go through a dip, but with the right federal changes things may be back to normal within 15-20 years.
I’m just starting to get into investing. I turned 21 a few weeks ago and i figured it’s about time to make some smart decisions with my money. Please feel free to give me advice or comment.
That being said what I recommend to you (and what i plan to do) is taking Warren Buffett’s philosophy and Peter Schiff’s strategies and combining them to make some great investments.
Take Buffett’s idea of looking into a company’s management and doing heavy research before you invest in them, got it?, good. Then combine that with Schiff’s idea’s to invest in companies in foreign countries because of American uncertainty.
Now, instead of wasting Buffett’s great philosophy’s on a very volatile American market, I’m going to apply them to growing foreign companies. You should do the same.