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Learning how to invest and explore the company 's Warren Buffet

" People have learned not many people know that is someone who knows what they must know
and understand what we already know "- Marius Grout


Learn to understand the company's Warren Buffet

An investor caution never choose the company they do not know. Like a smart investors never buy shares of companies belonging to the areas in which they do not understand.
Warrren Buffet comment on company stock options

In 1977, Warren Buffett told shareholders of his company - Berkshire Hathaway that he will only invest in those places where the board of directors to understand them, and repeatedly stressed this message later. In 1992, he expanded:
" We will approach the business that we certainly have known. Meaning that the target company must have two characteristics: a stable and uncomplicated. If a company's business are more mixed or unexpected problems before we would face many difficulties in forecasting cash flows. "- Warren Buffett
The company that Warren Buffett chose to invest

Warren Buffett selected primarily companies in the fields of consumer and finance, including some world leading companies such as:

- Coca Cola
- American Express
- Gillette – sau đó bị mua lại bởi P&G
- Moody’s
- Washington Post
- Wells Fargo
- Goldman Sachs
- M&T
- H&R

Most of these companies appear in this list not only famous for the American people but also globally known people.
Buffet is a major shareholder and long-time big companies like Coca Cola


- Coca cola beverage company leading, production and distribution of products such as Coke, Fanta, Sprite, Minute Maid or Evian. These products are too familiar to the public and almost become the most popular brand worldwide.

- American Express is a global brand, working in the field of international payments for tourists and other credit card services. This company has a long history and business model familiar to the amateur investors can understand.

- Goldman Sachs is a leading investment banking and is the highlight of the US during the post-crisis recovery.
Warren Buffet và Keynes

Warren Buffet way, he would never invest in businesses that he was skeptical about the business, the administrator or the financial position of the company. He advised individual investors should do the same, like the great economists, investors succeed John Maynard Keynes said:


" As time passed, the more I believe more growth, more investment that exact method is putting most of its capital in a company they already know ... "- Keynes
Why Buffett does not invest in Microsoft?



Warren Buffet has a good relationship with Bill Gates, but did not choose Microsoft to invest

As the Buffet once said, you know, and really admire Bill Gates and Microsoft Corporation. But he never invested in it because he was not deeply understand the inner apparatus and operating activities of Microsoft.
The more complex company

A company like Unilever, for example. This is an operating company for so long, there is strong brand and global market. But the company understand how to operate this simple?

There are two companies jointly owned Unilever, one in English and one in the Netherlands. Of course the operation, Unilever remains a unified company but the two parent companies have no ownership stake in the small subsidiary of Unilever makes risk-oriented activity is quite clearly inconsistent substantially. This shows that a company has a very good, but complex operation apparatus will do very many investors do not understand the object of your investment.
Understand a company

Understanding a company involves carefully study and personal experience and a successful investor will invest in stocks as if they acquired one such enterprise.

They will choose to buy a company operating in the areas in which they have knowledge or have fully understood. They understand the financial situation, they understand how to operate in the past and the future potential and then, is a process of comparing prices to take the final decision to buy or not .

A Buffet's advice: "First worthwhile for most investors is not the company they understand to what extent, that is the way they determine that the things you did not know about the company, including the role How ".

Robert Hagstorm - who has watched most of Buffett's investments in recent years have agreed that Buffett has decided to invest with the company he knew. "Understanding the revenue, expenses, cash flows, labor relations and capital allocation is a prerequisite of what Berkshire Hathaway owns".

And Hagstorm also said that investors towards caution should investigate all the factors mentioned above.
Gather preliminary information

The first difficulty that individual investors faced was obtaining information. Investors can track through reports from financial intermediaries or the reporting of potential companies. Then do it yourself an aggregate and analyze data. These investors do not have such conditions can choose to simplify rather than receive summary information from service for investors.

There is an anecdote of a young age, often on their own to meet Buffet potential companies to obtain information. Not all investors are able to do so, but they can totally rely on some personal experience about the product around their own lives to make investment decisions. You just try a new life of Gillette razors, too cool, clean and pleasant, your friend is excited about it. So why wait, without "pay attention" to the shares of P & G!
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