Physicians by nature are often great scholars. Continuing education is vital to maintaining proficiency as a practitioner. As a result, most doctors appreciate the expertise of others. When it comes to investing, there may be no greater expert and mentor to the masses than Warren Buffett. Known as the Oracle from Omaha, Mr. Buffett has spent a lifetime creating wealth through common sense, patience, and a shrewd perspective on value.
Here are some nuggets of wisdom that Mr. Buffett has shared over the years. These can offer practical advice on investing, financial planning, and life in general.
It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.
This is often described as Mr. Buffett’s motto. It does provide an insight into the cornerstone of his investment strategy. It’s all about value. Delving into penny stocks or long-shot initial public offerings may offer riches once in a great while but investing prudently in a business that offers real value is a surefooted approach to wealth building.
Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1.
This quote certainly gets to the heart of the matter. Sometimes in the thrill of investing, a person can forget the true objective of this action. You are placing your hard-earned money somewhere in the hopes of growing it and preserving it. Repeat this rule to yourself whenever you are faced with a tempting, high-risk stock tip.
Beware the investment activity that produces applause; the great moves are usually greeted by yawns.
The fact of the matter is that good financial planning and sound investing are often boring. They are built on a foundation of research, sound advice, and diligence. Go to an amusement park if you want thrills. Heed Mr. Buffet’s astute observation when you put together your financial planning strategies.
Never invest in a business you cannot understand.
This is another one of Mr. Buffett’s most famous quotes. Admitting that you don’t understand something is difficult and in many ways an act of courage. It’s so easy to be pulled into a hot new investing trend by friends or colleagues. Take a moment to consider research, exploration, and advice gathering. Be ready to admit you don’t understand something when the facts don’t add up. And when in doubt, it doesn’t hurt to think, “What would Warren Buffett do?”
