Warren Buffet knows a little bit about investing. The chairman and CEO of Berkshire Hathaway is worth more than $87 billion—the third-richest person in the world.
He began picking out stocks at 11 years old. By the time he was 16, Buffet had amassed the equivalent of $53,000 in today’s dollars.
He shared some of his secrets in a recent letter to Berkshire Hathaway shareholders. Here are two tips:
Treat stocks like businesses not tickers
“I view the stocks that Berkshire owns as interests in businesses, not as ticker symbols to be bought or sold based on their ‘chart’ patterns, the ‘target’ prices of analysts, or the opinions of media pundits,” Buffett wrote.
Good businesses, he adds, will be good investments in the long run.
“We simply believe that if the businesses of the investees are successful (as we believe most will be) our investments will be successful as well. Sometimes the payoffs to us will be modest; occasionally the cash register will ring loudly. Overall—and over time—we should get decent results. In America, equity investors have the wind at their back.”