Warren Buffett, CEO of Berkshire Hathaway, is one of the world's richest investos and he is followed as an idol for investors and businessmen worldwide. He has been sharing many techniques and tips over the past many years and people have gained on their investments by following his tips. He believes that a little smartness, patience, and timing are the ingredients of becoming a successful investor. Let's learn a few of the best advices given by Warren Buffett, which can make you think like him. 

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

1. Make a list of the businesses you understand:

The first step is to make a list of the businesses you understand. Never run for a company that does business out of your understanding. Simple businesses have higher chances of growing in the long term, believes Buffett. Do your homework before picking a stock. An investor should study the product or service line, the company deals in and the market it operates. Make sure you grab out some information about the competitors and compare the sales, margin and profit numbers accordingly. These are some basic techniques to make an investment portfolio of some good companies.

2. Read everything possible about the company:

Read and read a lot! Age-old advice which Buffett emphasises upon. Reading about the company before investing can make your mind ready. It ensures that you know each and everything about the business, before putting your hard earned money at stake. It involves researching a bit on earnings of the companies, the rate of return on equity and profits, checking with the amount of debt on the company, promoter's holding, management earnings, news analysis etc. The numbers never lie, and therefore they should be examined patiently beforehand.

3. Invest, as if you are buying the company:

People buy stocks on the basis of the returns they have given, recommendations by experts or relatives, gut feeling etc. But buying the stock should be like buying a business, believes Buffett. He says, "If you want to choose the right stock, pick a company you would love to buy". You only buy what you trust, and that is how investment into stocks should also go. Before buying any stock, no matter, how much volume you eyeing, gather more than 100 per cent information about the company under your belt.