21 Wise Thoughts from Buffett on Finding Stocks, Analyzing Stocks and Valuing Stocks

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7 Wise Thoughts from Buffett on Finding Stocks

1. Buffett read every company listing to understand each one.

2. He prefers businesses he understands, narrowing choices significantly.

3. Separate businesses you understand from those you don’t; focus on the former and analyze without knowing stock prices first.

4. Seek unique companies often overlooked by others.

5. Invest when others aren’t interested, avoiding popular stocks.

6. Look for simple, achievable investment opportunities.

7. Buffett’s approach remains consistent: read extensively about understandable businesses.

7 Gems from Buffett on Analyzing Stocks

1. Recognize your limits and keep investing simple.

2. Analyzing securities remains unchanged over time.

3. Buy businesses with strong, enduring returns and fair management.

4. Munger emphasizes buying value over cost.

5. Evaluate stocks as businesses, not based on external opinions.

6. Avoid capital-intensive industries outside utilities for better returns.

7. Understanding a business’s competitive edge is key, not just financial metrics.

7 Nuggets from Buffett on Valuing Stocks

1. Buy stocks like businesses, estimating future earnings sensibly.

2. Buffett’s farm purchase was based on expected returns despite initial inexperience.

3. Intrinsic value is crucial but uncertain; consider future competition and costs.

4. Recognize that market corrections may delay value realization.

5. Use a consistent discount rate for all securities.

6. Don’t settle for low yields even when interest rates are low.

7. Valuation depends on economic characteristics and cash flow, not just ratios.

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