Warren Buffett’s good advice for a wise investment in the stock market

BERKSHIRE HATHAWAY . The company led by the guru of US finance has seen its action multiplied by more than 1,000 in thirty-five years. A good reason to follow the recommendations of the Omaha oracle.They were twelve in 1981. They are now 35,000 to travel to Omaha, Nebraska, a state lost in the center of the United States . The shareholders of Berkshire Hathaway come from all over the world to attend the company’s annual general meeting, a must-see event on the agenda of the fellows. It was during this “Woodstock of the Capitalists” that its eminent boss, Warren Buffett, delivers the performance of the conglomerate by enamelling his speech of good phrases, confessions and advice to investors.

Berkshire Hathaway , originally a textile company, now carries on insurance business. At the same time, the group took control of companies, often family-owned (the BNSF, the jeweler Borsheims, the confectioner See’s Candies …), and acquired minority shareholdings in large companies (Coca-Cola, Wells Fargo …).

The legend of Warren Buffett, the world’s fourth largest fortune, according to Bloomberg, has been written over its stock market successes. Among other judicious investments, he has, for example, multiplied his stake by more than six on the American Express title, one of its main lines, worth about 8 billion dollars.

But his aura has also strengthened thanks to the mistakes he did not commit. It has indeed emerged unscathed from the two crashes that have rinsed more than one investor in recent years: the Internet bubble and the subprime crisis. This exploit does not owe anything to chance. Warren Buffett has long enjoined shareholders to invest their money only in companies whose mechanics they grasp. In 2003, well before the financial crisis, he stressed: “When we finish reading the long footnotes detailing the activities related to the derivatives of the biggest banks, the only thing we understand is that we do not understand the the extent of the risk facing these institutions. ”

Net assets multiplied by 6,000 since 1965

The Omaha oracle journey is not just about success. In particular, he acknowledged that it was too late to leave the textile sector. But over a long period of time, the figures speak for themselves: between 1965 and 2011, the value of Berkshire Hathaway’s net assets rose by 500,000%! Investing retained five of these “wise words,” distilled in its interventions to shareholders. They allowed us to select the Parisian values ​​that would have their place in the Warren Buffett portfolio.

Image by Mark Hirschey – Work of Mark Hirschey, CC BY-SA 2.0, 

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