The first rule: the principle of
competitive advantage
Good companies have good stocks: those
companies are clear and easy to understand, outstanding performance and
excellent by a group of extraordinary ability to be interested in the
management of the interests of the management of large companies is a good
company.
The most accurate corporate analysis
perspective - if you are the sole owner of the company.
The most critical investment analysis - the
competitive advantage and sustainability of the firm.
The best competitive advantage ---- swim
the crocodile's wide moat protection under the corporate economy castle.
The best competitive advantage measure -
the rate of return on shareholders' equity beyond the industry average.
Economic concessions ----- superstar
business super profit source.
American Express's economic concession:
Stock picking as a wife - the price is
better than the company good.
Stock picking as her husband: mystery as a
sense of security
Three major sources of modern economic
growth:
The second rule: the principle of cash flow
The value of a new pharmaceutical factory
and the acquisition of a pharmaceutical factory.
Value assessment is both art and science.
Valuation is estimated husband: the more money
the more valuable
The ability to control money.
The discount value of the future cash flow
of the firm
Valuation is the valuation of his wife: the
more conservative the more reliable
Buffett mainly uses shareholder return on
equity, book value growth rate to analyze the future sustainable profitability.
Valuation is the assessment of love: the
more simple and correct
The third rule: "market
gentleman" principle
Fear in the fear of others, fear when
others greed
The law of the value of the market: short-term
often ineffective but long-term tend to be effective.
An Empirical Study of Buffett's Price
Fluctuation in American Stock Market (1964-1998)
Market in the "A dry"
Behavioral finance research found that the
securities market investors often committed six foolish mistakes:
Sun Tzu in the market: use the market
rather than being used by the market.
The fourth rule: the principle of safety
margin
Security margin is "buy
insurance": the more insurance, the less the possibility of loss.
Security margin is "fierce
bargain": the lower the purchase price, the greater the likelihood of
profitability.
Security margin is "fishing big
fish": the less people, the higher the possibility of fishing big fish.
Fifth Rule: Concentrated Investment
Principles
Concentrated investment is monogamous: the
best, the best understanding, the minimum risk.
Five factors that measure the company's
stock investment risk:
Concentrated investment is family planning:
the less the stock, the better the combined performance.
Focus on investment is gambling: when the
probability of winning high betting nowadays.
Sixth Rule: Long Term Hold Principle
Long-term holding is the turtles and
rabbits race: long-term compound interest can overcome everything.
Long-term holding is eachother: with the
company like the life-long companionship.
Long-term holding is the old-fashioned:
love more than passionate 10000 times.
Good company will be able to make it clear
(Coca-Cola)
Good company a word can be clear (clean -
column marriage)
Finally I used a minute to tell everyone
how we should use, where to use the strategy of using Buffett's value to
invest.
Buffett's another investment principle is:
fear when others are greedy; greedy when others fear.
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