If Warren Buffett gets investment advice, shouldn’t you?
05 Apr 2017
Warren Buffett is considered by many to be the “greatest investor of all time” taking his company Berkshire Hathaway (named after a failing textile mill Warren bought) from $19/share in 1964 to over $220,000/share today. Berkshire is a holding company that not only buys shares of company stock (like you and me), but also owns companies outright, including insurance, energy, retail, and even the largest railroad in the United States.
With such a great track record, why would Warren “the great” need investment advice today? It just so happens, Warren has always received investment advice. First from his teacher and mentor Benjamin Graham (author of the intelligent investor) and later by Charlie Munger (Co-Chairman and partner at Berkshire Hathaway). The advice Warren received by Ben came early in Warren’s career and Charlie’s advice came later, here’s the difference:
Ben Graham’s advice: Find “OK” companies and buy them at a very low price; or better yet, buy companies “dirt cheap” with one last “gasp” left in them and sell them at a big profit. Like finding a cigar butt on the street that has one more smoke left in it… no cost to you, but one more puff left (gross, but you get the point.)
Charlie Munger’s advice: Buy great companies at a fair price and hold on to them “forever.” Charlie is the reason why Berkshire Hathaway is the largest shareholder of the Coca-Cola companies.
What stage of investing are you? Who is giving you investment advice? In today’s uncertain and fast-paced world, it may not be as simple as “drinking coke” and “smoking cigars” anymore.