Berkshire Hathaway founder Warren Buffett — one of the most successful investors in the world — says he and vice chairman Charlie Munger are not “stock pickers; we are business pickers.” In the company’s annual shareholder letter published over the weekend , Buffett explained that the “secret sauce” of their investing success is to make “investments in businesses with both long-lasting favorable economic characteristics and trustworthy managers.” This approach is known as value investing, where the goal is to hang on to a top-performing stock rather than trade stocks based on short-term price fluctuations, otherwise known as active investing. Of course, picking winners isn’t easy. But Munger has previously outlined four rules that the two Berkshire Hathaway executives follow when choosing whether to invest in a business. Aside from Buffett’s No. 1 rule, “don’t lose money,” here are four questions that Munger and Buffett ask when deciding whether or not to invest in a business. 1. Do you understand the business? Aside from knowing how a business operates and what it offers to consumers, you also want an idea of where a company is going to be in 10 years , if not for decades, says Buffett. “If you […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
