Warren Buffett is arguably the greatest investor of all time. But more importantly, he’s also one of the best teachers of investing. In his annual reports and countless interviews, he freely offers priceless wisdom that helped him become a billionaire, and that you can use to invest better and reach your financial goals sooner. Here are some of the lessons I’ve learned from him that have helped me achieve more success in investing, business, and life. 1 Stockpicking isn’t a hobby. Everyone should be an investor. But not everyone should choose their own investments. To be a successful investor requires thousands of hours of deliberate effortful study to master the necessary skills, and then thousands more (or in Buffett’s case, tens of thousands) to use those skills to find worthwhile investments. Buffett read every investing book in his local library, many of them multiple times… by the time he was eleven years old. If you aren’t willing to put in the time and effort that stockpicking requires, the person on the other side of your trades is likely to know more than you, which is a recipe for underperformance. In that case, you’re better off simply buying a low-fee index fund which passively tracks the market, like VFINX, which tries to match the S&P 500. All of the lessons below are relevant for active investing, but many of them also apply to passive investing, so I encourage you to read on regardless of whether you decide to pick stocks yourself or just buy the entire market.
Posted on: Thu, 06 Mar 2014 11:21:11 +0000