Wednesday, June 05, 2013

A Smart Investment Strategy: Invest Like Warren Buffet

Known as the Oracle of Omaha, Warren Buffet is the platinum standard by which investors only hope to measure themselves against. His knowledge of investing and the stock market has amazed those who have watched him make money no matter what the economy is like. His holding company of Berkshire Hathaway (BRK-A) (BRK-B) has what is known as the most valuable stock ever traded on the New York Stock Exchange and investors everywhere clamor to any news of his buying or selling of stock.

His portfolio is always public and if one were to examine it, you would see that his stocks are a reflection of his core attitude towards America and its values. He has always stated that America is still the best place in the world for a baby to be born and he has always tried to invest in the American companies that best demonstrate integrity, solid fundamentals, and a defensive strategy against the pitfalls of the economy. He likens his strategy to that of a castle with a wide moat as defense. The companies that have an impervious defense and a strong history of dividends can be found in Berkshire Hathaway. According to the database of Berkshire Hathaway stocks at, over 75% of the Warren Buffett companies pay dividends.

Although most of the companies in his portfolio are US based, they have a strong international presence, companies such as International Business Machines Corporation (IBM) which trades at 14 times earnings and yields 1.8%, and American Express (AXP), which trades at 19 times earnings and pays a dividend rate of 1.2%.

People often wonder how his investing strategy works and how he manages to make so much money. It’s pretty simple actually and he even tells you what he does. When everyone is selling, he buys, and when everyone is buying, he sells. It’s always been said that in order to make money in the stock market you buy low and sell high. In examining Warren Buffet’s strategy, he does exactly this. The fact that many people do not follow his investing advice is why his simple method seems so mysterious. Maybe Wall Street investors should actually take note of his advice and spend less time trying to make a quick dollar from trading and spend more time investing in a long term based ideology.

For a free list of stocks that Warren Buffett's Berkshire Hathaway owns, go to

Disclosure: Author didn't own any of the above at the time the article was written.

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