7 Rules of Investing | Warren Buffett - YouTube

Warren Buffett is one of the most successful  businessmen and investors in the world today. He  

is a multi-billionaire and currently acts as the  chairman and Chief Executive Officer of Berkshire  

Hathaway, an American multinational conglomerate  holding company. Over the years, Warren has given  

various tips, advice, and rules on investing  for those who want to succeed as well.  

And in this video, we will talk about seven of  these rules for investing that Warren himself used  

to ensure high returns on his investments. So stay  tuned because we will discuss each of these rules  

to help you achieve success from your investments.  You don't even need to have a high IQ to succeed.  

So make sure to watch this video to the end. This is Financial Intellect, where we promote  

that to be finance savvy, we are your buddy!  Now let's get right into the video!  

Rule Number 1: Understand  what you're investing in.  

Before deciding to invest in a company, make  sure that you understand the company itself.  

This is a very simple rule but many people seem  to disregard it. Warren himself is a testament  

to this strategy. Looking at his investment  portfolio, you will notice that all the companies  

he invested in are quite simple. He invested  in Southwest Airlines which sells flights,  

Coca-cola which sells drinks, Apple  which sells iPhones and other technology,  

and Furniture Mart which sells furniture. Warren  makes sure that he understands the company before  

deciding to buy stocks of that company. You should also do the same. Your investment does  

not have to be extraordinary to make it big. No  matter how simple your investments are, so long as  

you understand them, then you're good to go. So if you want to dive into eCommerce,  

there is Alibaba and Amazon. If you like cars,  there is Ford, Tesla, and Toyota. If you're  

into online technology, then there's Alphabet  and Meta. There are so many options out there.  

But first, make sure you understand the company  you want to invest in before diving head-first.  

Rule Number 2: When you buy a  stock, plan to hold it forever.  

You've probably heard about this financial  rule many times before. This is because  

this is where the compound interest will kick in  that will accelerate the value of your investment.  

When you get dividends and you let that grow and  compound, you can get more gains in the long run.  

Constantly buying and selling stocks will let you  miss out on the benefits of compound interest.  

In investing, it's all about time. So next time  you want to buy a stock, make sure that you plan  

on owning that forever. Just like Warren who has  owned stocks like Wells Fargo, American Express,  

and Coca-cola for over 25 years. If the company  has been performing well, there is no need to sell  

your stocks. Just hold on to it forever. Rule Number 3: If the business does well,  

the stock eventually follows. This rule was picked up by Warren  

from the book "The Intelligent Investor"  by Benjamin Graham, who later became his  

mentor. This rule is quite simple. When  you buy a stock from a certain company,  

you own a part of that company. If the company  does well, its stocks will also do well.  

So when investing, make sure to look for companies  that have the potential in dominating the market.  

Look for those who have loyal consumers, those  who are ahead of the competition, or those that  

make a high-profit margin. Do not complicate  yourself by diving into complicated companies.  

Just always remember that your stock investments  largely depend on the company's performance. Thus,  

if the company is performing well, then  your investments will do well too.  

Rule Number 4: Most news is noise, not news. Some might disagree with this but according to  

Warren, the news we hear is not necessary.  In investing, the news we hear from YouTube,  

news channels like CNBC and BBC, and newspapers  aren't always right. Just remember that they  

are paid to get views and readers as much  as possible. So to do that, they sometimes  

have to create tension and hype. More viewers  and readers mean they can get paid more.  

As Warren puts it, "owners of stocks, however,  too often let the capricious and often irrational  

behavior of their fellow owners cause them  to behave irrationally as well. Because there  

is so much chatter about markets, the economy,  interest rates, price, behavior of stocks, etc.,  

some investors believe it is important  to listen to pundits - and, worse yet,  

important to consider acting upon their comments."  

So next time you are tempted to invest because  a financial guru told you to do so, take a  

pause instead and think about it hard. Only pay  attention to important details and that's it.  

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when we've posted new content such as this. Now,  let us continue to the next investing rule.  

Rule Number 5. Only listen to  those you know and trust.  

In investing, there are lots of  investors and mentors you can go to.  

Warren himself has always been listening  and learning from other investors as well.  

He had Benjamin Graham as a mentor who  taught him about how investing works,  

and he has Charlie Munger as well  to give him investment advice.  

When investing, make sure to also listen  and learn from other investors as well.  

You have Warren Buffett, you can see his  investments and the stocks he purchases every  

year. There is also Charlie Munger, Warren's  vice-chairman in Berkshire Hathaway. And then  

there is Ray Dalio who we can often watch on  CNBC giving various tips on investments.  

However, also remember not to listen to  every pundit who gives you investing advice.  

Instead, listen and learn only from  those people you know and trust.  

Rule Number 6: Be fearful when others are  greedy and greedy when others are fearful.  

In today's market conditions, this rule is  relevant. The market conditions in the last  

eleven years is a bull market, where stocks have  gone up over 300%. Everyone in the market gained  

and made money, which might make them think  that they were geniuses in stock investing.  

Now, what will happen if everyone is overconfident  in their investing skills? Everyone becomes  

greedy. And stock prices will over inflate  because everyone wants to buy and invest. It  

will be harder to find a deal in the stock market  because stock prices will go higher and higher.  

However, according to Warren, these are the times  when you need to be fearful and careful with your  

investments. Warren himself has $214 billion in  publicly traded stocks but he made sure he also  

has $128 billion in cash. These might seem like  a lot of money to keep in cash but Warren is very  

careful with his investing strategy. In a bull  market, you could say that Warren is fearful.  

But, if the panic starts to set in,  for sure Warren's greed will kick in  

and he will be using his cash to buy a lot  of stocks when they are priced lower.  

Rule Number 7: Buy at a price  below intrinsic value.  

All other rules of investing will go out of  the window if you do not follow this rule. Your  

investing strategy will even be useless if you do  not consider this. Always remember that companies  

are not worth an infinite price no matter how good  it is, no matter how much you know the company,  

and no matter how good the managers are. Instead,  make sure that when you are buying stocks,  

prices are below or at intrinsic value. So when you are considering buying a Tesla car,  

one question you should ask yourself is - is it  worth the price? There is no doubt that quality  

is good but also remember that no car is worth an  infinite price. The same also applies to business  

stocks. As Warren puts it, "no company, no  matter how wonderful, is worth an infinite price.  

The price is what you pay. value is what you  get" So make sure to know the value of each  

stock before buying it. Calculate the intrinsic  value and make sure it is worth the price.  

And those are the seven investing rules from  Warren Buffett to also help you achieve high  

returns from your investments. What are your  thoughts on these rules? Do you agree with  

Warren? Or do you have other rules and strategies  in mind? Let us know in the comment section below.  

We'll love to hear your views and insights. And with that, thank you very much for watching.  

If you like what you've watched, stay tuned  for more videos! Bye Financial buddies~