so in this video here we're going to be
talking about ten different ways that
you can be investing like Warren Buffett
if you're not familiar with who Warren
Buffett is I'd be very surprised he is
probably the most successful investor in
well-known investor of our time and a
lot of people really look up to him and
his investing strategy and they want to
replicate his strategy and be just like
Warren Buffett and hopefully down the
road be a billionaire someday and so if
you guys want to do that this is Warren
Buffett strategy these are the 10 things
that he is doing and this is how you can
begin to invest like Warren Buffett
number one the first thing you need to
do to invest like Warren Buffett is to
invest in what you know Warren Buffett
invests in very simple and easy to
understand businesses like coca-cola or
Kraft Heinz or American Express these
are very simple businesses that anybody
type of business that he invests in now
does that mean that you shouldn't invest
in biopharmaceutical companies or
technology companies well that all
depends if you understand
biopharmaceutical companies then yes you
could invest in that because you are
investing in what you know but if you
don't know anything about the company
you're considering investing in you
should not invest in that stock and one
of my favorite ways to tell whether or
not you understand what you're investing
in is to give yourself the elevator
pitch test so you should be able to give
somebody a 30-second elevator pitch
telling somebody exactly what this
company does and pretty much be able to
explain it to anybody regardless of what
they previously knew about that company
and if you sit there trying to do this
and you can't really explain what this
company does then you should not be
investing in it you should invest in
what you know and that could be
different for everybody if you know a
lot about biopharma or mining precious
metals and mining gold or oil that could
be something you invest in but if you
don't know a lot about these industries
or these companies stay away from them
number two the second thing you need to
do if you're going to invest like Warren
Buffett is understand the difference
between price versus value and this is
something that warren buffett learned
from his mentor benjamin graham if you
guys want a really good
book on investing I would check out the
Intelligent Investor by Benjamin Graham
one of the major lessons of that book is
understanding the difference between the
price and the value most people will
look at a stock and they will believe
that that price of the share determines
the value but a value investor
understands that there's an underlying
value to that ownership in that company
and the price will fluctuate sometimes
the price exceeds the value and
sometimes the price is less than the
actual value and those are the
opportunities that Warren Buffett will
jump on when the price is well below the
value opportunity that is when he will
invest and if that price is above the
value the value of what you're getting
then he's not going to invest in that
company number three if you're looking
to invest like Warren Buffett this ties
in with the second piece you're going to
be investing in cheap stocks you're
going to understand how to value a
company and you're going to be able to
determine when that price is below the
value and when that price is above and
once you find a stock of a company and
it's a business that you understand and
it follows these other criteria we're
gonna go through and it's at a good
price and it's cheap relatively cheap
compared to the market that is when
Warren Buffett is going to invest and
anybody who's familiar with Warren
Buffett's strategy knows that he is not
afraid to sit on cash right now he's
sitting on billions of dollars because
he does not believe there are any good
opportunities at a fair value in the
market so Warren Buffett is incredibly
patient he'll sit there on cash year
after year just because a good
opportunity has not come along and if
you want to be investing like Warren
Buffett you have to have that same level
of patience number four the fourth way
that you can invest like Warren Buffett
is to invest in durable time-tested
businesses so you're not going to see
Warren Buffett running out there and
buying marijuana stocks you don't see
Warren Buffett going out there and
investing into cryptocurrencies and
there's a couple of reasons first of all
these are probably businesses he does
not understand particularly looking at
cryptocurrencies or you know things that
he doesn't understand but the main
reason why he would not invest in
something like that is because it is not
time-tested
a lot of Warren Buffett's investments
are companies that have been around for
50-plus years or even off
hundred or more years so these are
companies that have been through good
times they've been through bad times
they've pretty much experienced
everything at that point and these are
durable companies that have been through
everything and that's what he likes is
to invest in companies with a long track
record of making money and a consistent
operating history the fifth thing you
need to do if you want to invest like
Warren Buffett is get to know the
management of a company Warren Buffett
pays a lot of attention to the
management team of a company and if you
guys want to be like Buffett you need to
be looking at who is the CEO who is the
president who is the chief financial
officer you need to get to know the
corporate level the management team and
you need to study these people and say
okay you know if I was running a
business are these the type of people I
would want to be working with or are you
hearing about the management team
getting in trouble or are you hearing
conflicting messages from them and above
all else what warren buffett looks for
is whether or not the management team is
honest with the shareholders if they're
honest with shareholders about what's
working and what's not
that's what he likes to see but he does
not invest in companies when the
management team is dishonest with
shareholders so if you are going to
invest like Buffett you're going to
spend a lot of time researching and
studying the company management number
six the sixth thing you need to do to
invest like Warren Buffett is to be
greedy when others are fearful and this
is very simple this again was something
that was taught by Benjamin Graham
talking about you know pessimism versus
optimism and how the market is a
pendulum always swinging between you
know unjustified pessimism and
unsustainable optimism so that is what
Warren Buffett typically does he waits
for there to be fear in the market or
fear within one stock when people are
selling out of it and then that price
falls below the value and that is when
Warren Buffett begins to invest in that
company this is very simple to
understand as well a lot of people who
talk about the stock markets say that
you should buy low and sell high and
this is typically exactly what Warren
Buffett does when that share price has
fallen
that is when he begins buying shares of
a company and Warren Buffett rarely ever
sells investments pretty much all he
does is buy but if you are looking to be
a long term investor like Warren Buffett
you're going to buy shares when they are
low
you're going to sell them you know
probably years down the road five to ten
years down the road when they are
trading at a higher price and you're
going to be greedy when others are
fearful so my favorite example to
explain this is to look at laundry
detergent so if you went to the store
and you were looking to buy some tied
laundry detergent and you had an idea of
what you normally paid for them and you
went there and it was two or three
dollars more than what you normally
would pay for it you might say you know
what this is ridiculous
I know the value of that laundry
detergent I'm not going to buy it today
but let's say you go back to that store
the next week and it's buy one get one
free on that tide laundry detergent well
now you know that the price you normally
pay for that Lauren to detergent well
you're gonna get twice what you normally
give so you're gonna load up you're
gonna buy a lot because of the sale
going on with that Tide laundry
detergent but it's funny because the
same exact thing will happen with the
stock market you could see a sell-off
with Procter and Gamble stock the people
that make Tide people will buy Tide
longer detergent on sale but they won't
buy stocks on sale they're not gonna
load up on shares of Procter & Gamble
they're gonna say oh my gosh that share
price is low there must be something
wrong here I'm not going to invest and
then when that stock is trading at
all-time highs they're gonna say oh I
better buy that this is a really good
stock and it's the exact opposite of
what you need to be doing and that
really comes down to the psychology of
investing and understanding that you
have to buy low and be greedy when
others are fearful number seven the
seventh thing you could do to invest
like Warren Buffett is to have a long
term mindset some of Warren Buffett's
investments date back to as early as the
1960s and he's held these stocks for
over 50 years like I said already Warren
Buffett rarely ever sells investments he
buys and he doesn't really sell that
often and that can be your mindset to
have with investing
stocks are a long-term investment some
people try to trade them some people do
trading that is not my area of expertise
and that is certainly nothing that
Warren Buffett has gotten involved with
people like Warren Buffett and myself
see stocks as a long-term investment at
least you know one to five years if not
a lot longer and if you want to be like
Buffett you're going to have to have
very long-term mindset and you're gonna
have to be incredibly patient and
understand that you may go six months or
a year without a good opportunity but
when that opportunity arises that is
when Buffett will take a massive stake
in that company and invest a lot of
money number eight the eighth way you
can invest like Warren Buffett is to
follow the to fund portfolio and this is
something Warren Buffett has recommended
the basically a way that people can
invest very simply is by investing in
two ETFs or exchange-traded funds and
basically just buying those funds
regularly accumulating shares and just
doing exactly that now that's going to
go into a little bit more detail and so
I actually did it right up on that over
on my blog investing simple dot blog I'm
going to include a link for that down in
the description below if you guys want
to learn more about that to fund
portfolio and I'm going to include more
information about everything we covered
in this video here as well number nine
if you want to invest like Warren
Buffett you could simply invest in
Berkshire Hathaway stock that is
essentially Warren Buffett's holding
company where he has all of his
investments and it is a company that has
been outpacing the S&P 500 for decades
in terms of the performance of the share
price now understand this however that
while Berkshire Hathaway has
outperformed the market previously
Buffett has said this is going to become
more and more difficult to do as time
goes on because they have so much money
to be investing Warren Buffett has over
a hundred billion dollars in cash right
now within Berkshire Hathaway that he
has to invest at some point and it's
going to be harder and harder to realize
returns and get a return on a larger
amount of money because if he identifies
an opportunity and it's a company with a
ten billion dollar market cap what's he
gonna do buy 20 percent of that company
for two billion dollars even if he
doubles his money in that investment
it's not going to have any kind of
substantial impact on the overall
returns and the profits for that company
so that is a problem you're running to
is when you have so much money to be
investing you're limited to just
investing in large companies on the S&P
500 and there aren't a lot of
opportunities that you can take
advantage of just because they are too
small to be worthwhile to be investing
in
so that is a good stock that you guys
could invest in if you want to be buying
exactly what Warren Buffett buys but
it's probably not as good of an
opportunity as it was 10 or 20 years ago
for that exact reason and we also have
to mention that Warren Buffett
is aging and at some point he's going to
have to step down from that and you know
if you want to be investing like Warren
Buffett I think it's better to learn his
strategies than it is to just follow him
blindly it's kind of like catching a man
of fish versus teaching a man how to
fish you would be better off learning
how to fish than just having somebody
hand something to you like that and then
the final way you can invest like Warren
Buffett is to ignore market forecasts
anybody who's telling you there's going
to be a crash or a recession or anybody
who's trying to basically tell you what
to think about a stock or a particular
market Warren Buffett formulates his own
opinions when it comes to investing in
the stock market and he pretty much
ignores all of the noise on Wall Street
from analysts that is a really good
strategy you guys should follow as well
don't pay attention to the noise pay
attention to all these other factors we
talked about make investments be very
patient understand what you're investing
in have a long-term mindset and then
once you buy a stock commit to owning
that company and being a shareholder and
that is pretty much what you do to
invest like Warren Buffett you don't see
Warren Buffett buying stocks and selling
them left and right he's not buying
marijuana stocks he's not buying crypto
currencies this is exactly what Warren
Buffett is doing anyways guys it's gonna
wrap up this video I hope you enjoyed it
like I said I have a full article over
on the investing simple blog I'm gonna
link it up down in the description below
it's gonna go into more detail about
everything we talked about here as well
as the to fund portfolio that Buffett
recommends but thank you guys so much
for watching this video if you're new
make sure you subscribe to be notified
of any future uploads and I will see you
in the next video if you are interested
in learning more about investing in the
stock market I've created a free course
just for you the link is in the
description below here are a few other
videos you might enjoy as well
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