Warren Buffet in investing has several strategies in buying investment options stocks. The following are the criteria for stocks purchased by Warren Buffet:
- Cheap stock
Warren Buffet buys stocks that have low valuations. Warren Buffet buys stocks that have a PBV below 1, and which are still very cheap compared to the industrial sector but have very good potential.
Cheap stocks to buy are stocks that do not have too much price volatility, and Warren Buffet buys stocks that many people don’t know about.
- Safe and niche stocks
The next criterion that Warren Buffett buys is safe stocks. Safe here means stocks whose products are GENERAL, UNIQUE USED BY MANY PEOPLE. As an illustration, Warren Buffet’s stock portfolio is filled by Coca-Cola, Kraft Food, Well Fargo, Anheuser-Busch stocks. The stocks owned by Warren Buffet are stocks whose products are embedded in the minds of consumers and society.
Warren Buffet doesn’t hold commodity stocks for very long periods of time, as Warren did with Coca-Cola. This is because commodity stocks are seasonal stocks and commodity products are not unique or niche products.
- Not a stock that is being prestige of many people
This is the last point you should know if you want to invest in stocks. Warren Buffet only invests in known companies. When the Dotcom company was booming on the US stock exchange, he never bought his shares.
Warren only buys stocks that are clear and not just stocks that are being bought up for sale. Warren buys stocks whose products can be ‘durable’ in the long term. Warren said he was more interested in buying stock in a chewing gum company because changing technology would not change the way people chew gum.
You can adopt Warren Buffet’s investment philosophy in implementing your long-term investment strategy.