Wednesday, July 28, 2010

Warren Buffer's tips for investor

1. Look at stock as part of businesses. Ask yourself "How would I feel if stock market is closing tomorrow for the next 3 years?" If i am happy owing the stock under that circumstances, i am happy with business. That frame of mind is important to investing.

2. The market is there to serve you and not to instruct you. It's not telling you whether you are right or wrong. The business result will determine it.

3. You can not precisely know what a stock is worth, so leave yourself a margin of safety. Only go into things where you could be wrong to some extend and come out OK.

4. Borrow money is most common way that smart guy go broke.

5. The stock does not know you own it. You have feelings about it, but it has no feeling about you. The stock doesn't know what you paid. People shouldn't get emotional involved with their stocks.

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