Warren Buffett reveals the rules for investing and making profits

Son of a stockbroker from Omaha, Nebraska, Warren Buffett He was born a year after the financial crash of 1929. He bought his first stocks at 11 and invested in land at 14. As a child he sold soft drinks, lemonade and newspapers.

In 1956, he founded his own investment firm, Buffett Associates, which, nearly a decade later, purchased the textile company Berkshire Hathaway.

Thanks to yours way of managing moneyBuffett remains one of the ten richest men in the world today.

His books, in which he reveals some of his secrets to succeeding in business, are best seller. Known as the “Oracle of Omaha,” Buffett shares his knowledge so many people can invest and make profits.

Warren Buffett reveals the rules for investing and making profits

Here are a dozen tips from “investment master”published on the blog of the Spanish bank Bankinter.

1) Never lose money and always remember the fundamental rule: keep a conservative and defensive approach about the world of investments. Before thinking about how to earn, the priority is always to protect your capital.

2) Price is what you pay, value is what you receive. Price reactions in the markets do not always adequately reflect changes in the value of companies. When the price falls below the value of the firm, a purchasing opportunity. Therefore, it is important to know how to differentiate both figures.

3) Be greedy when others feel fear and fearful when others feel greed. To take advantage of market fluctuations, you must always maintain a critical and independent mentality be able to act against excesses of volatility, both in a bullish and bearish sense.

4) It is much better to buy a wonderful company at a reasonable price than a reasonable one at a wonderful price. Buffett gives more importance to quality of the signatureeven if this means paying an entry price that is not necessarily very low.

5) Wall Street is the only place where people riding in Rolls Royces get advice from people riding subways. No one knows what it is better than you assets that best suit your risk appetite and your performance goals.

6) Time is the friend of wonderful feats and the enemy of mediocre ones. As time passes, the quality companies with strong competitive advantages They tend to increase sales and profits.

7) Try investing in companies that can be run by any idiot, because sooner or later some idiot will take care of it. Buffett pays close attention to management quality when selecting assets. However, he knows that it is always a temporary factor.

8) When we own extraordinary businesses with extraordinary management, our preferred investment period is forever. The value of high-quality companies tends to increase over time, which is why Buffett selects those that have a lasting quality. If things go as planned, many times there is no exit horizon for the position.

9) After all, you only find out who swam naked when the tide goes out. THE real test on the quality of a company happens in difficult times.

10) Inside long term, the market news will be good. Over the course of the 20th century, the United States endured two world wars and other military conflicts, the Great Depression, more than a dozen recessions and financial panics, oil shocks, epidemics and the resignation of a disgraced president. However, the Dow Jones rose sharply during that time.