The 3 Most Important Things to Learn from Warren Buffet

1. The 3 Most Important Things to Learn from Warren Buffet

2. 1. Don’t be swayed by market conditions “I've been buying American stocks. Why? A simple rule: Be fearful when others are greedy, and be greedy when others are fearful.” The quote above came in Buffett’s op-ed in the New York Times in October 2008, as the financial crisis gripped the world. While Buffett’s investments during the crisis are hailed, so too should his investments in the years after.

3. 1. Don’t be swayed by market conditions Buffett invested in Wells Fargo throughout 2011 and 2013, as questions arose surrounding the viability of financial institutions in the U.S. However Buffett was undaunted, as he understood the value of Wells Fargo and continued to pour money into the bank, as grew his holding by nearly 40% over three years. As the years progressed, the price of the company rose by 70%.

4. 1. Don’t be swayed by market conditions

5. 2. Don’t only trust the prices “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” This often recited quote of Buffett was first noted almost 25 years ago in his 1989 Letter to Shareholders. Many thought Buffett to be a strict adherent to the Benjamin Graham school of value investing, but here he shows that his decisions aren’t crafted exclusively by a relative valuation.

6. 2. Don’t only trust the prices While ExxonMobil is one of the largest and most valuable companies in the world, few would say it fit the bill for a “value investment,” when Buffett began purchasing shares in the second and third quarter of 2013. However, it represents a company that is indeed a “first-class business accompanied by first class management.” Buffett shows us investing goes beyond simply the financial statements.

7. 3. Be patient “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.” All too often, investing portfolios are monitored on a daily or even hourly basis -- yet Buffett notes that investments should not be subject to market fluctuations but instead, made with long-term thought and conviction.

8. 3. Be patient Consider Buffett’s investment in IBM which was first disclosed in November of 2011. Yet since then the company has dramatically trailed the market:

9. 3. Be patient Buffett likely remains undaunted by the lagging performance of IBM. After he made his initial investment in the company, he highlighted one of the key drivers of his thought was the company’s plans through 2015. In a recent interview with Charlie Rose, Buffett seemed determined to reiterate that he still believed in IBM, and noted the company would deliver record per-share earnings this year.