Warren Buffett may be the greatest investor in history, and he has tips explaining how he managed to convert $ 40 to $ 10 million.
But do not think investing in Coca-Cola was something that was obvious and predictable in those days. Sugar prices were on the rise, World War I was over just a year ago, and the Great Depression took place in the next few years.
Then came the Second World War, which caused the codification of sugar. There have been countless events over the past 100 years which could make anyone question the validity of investing their money in stocks, let alone investing in a consumer goods company such as Coca-Cola.
"When you invest in a great company, you can predict what will happen, but you can not predict when that will happen. So do not focus on "when", focus on "what". If what you expected was true about what, you do not have to worry about when. "
In many cases, investors are advised to try market timing, start investing when the market is on the rise, and sell when the market falls.
There is a great emphasis on stock-and-buy price monitoring based on price volatility in 200 days or on monitoring price fluctuations that may appear to be peripheral, and they are heavily covered by the media, but this technique has proved to be no different from mere coincidence .
So it's important to understand the approximate price you buy in that company. What's unimportant is trying to understand that you were bought at the right time or not, because knowing it is not pure imagination.
Or, as Buffett puts it, "If your view of the company you intend to invest in is true, you will make a lot of money." So do not be interested in buying in a company that seems to have a good stock price in the past 200 days, but focus instead on buying in a wonderful company at a good price. "
1. Power of patience
I know that $ 40 in 1919 is very different from $ 40 today. Even with inflation, however, $ 40 is now $ 540. That is worth worth the value of an Xbox.But do not think investing in Coca-Cola was something that was obvious and predictable in those days. Sugar prices were on the rise, World War I was over just a year ago, and the Great Depression took place in the next few years.
Then came the Second World War, which caused the codification of sugar. There have been countless events over the past 100 years which could make anyone question the validity of investing their money in stocks, let alone investing in a consumer goods company such as Coca-Cola.
2. Timing risk
Warren Buffett, however, always warns of the risk of trying to market the timing."When you invest in a great company, you can predict what will happen, but you can not predict when that will happen. So do not focus on "when", focus on "what". If what you expected was true about what, you do not have to worry about when. "
In many cases, investors are advised to try market timing, start investing when the market is on the rise, and sell when the market falls.
There is a great emphasis on stock-and-buy price monitoring based on price volatility in 200 days or on monitoring price fluctuations that may appear to be peripheral, and they are heavily covered by the media, but this technique has proved to be no different from mere coincidence .
3. Long term investment
Individual investors understand that investing is not a bet in a sports game; it is buying a tangible stake in a company.So it's important to understand the approximate price you buy in that company. What's unimportant is trying to understand that you were bought at the right time or not, because knowing it is not pure imagination.
Or, as Buffett puts it, "If your view of the company you intend to invest in is true, you will make a lot of money." So do not be interested in buying in a company that seems to have a good stock price in the past 200 days, but focus instead on buying in a wonderful company at a good price. "
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