Warren Buffett – How Warren Buffett’s Advice Helps I Invest £ 1,000
Warren Buffett is one of the largest investors in history. Over the last 70 years, he has made over $ 100,000 in initial investment. $ 700 billion in assets..
Anyone can learn a lot by looking at the careers of well-known investors. I certainly learned a lot. Indeed, if today I had to invest a lump sum of £ 1,000, I would follow his advice.
Warren Buffett’s advice
Buffett believes that investors should only buy quality companies. These are companies with a substantial competitive advantage, from economies of scale to global brands.
Two of his favorite companies Apple And Coca Cola.. Both of these organizations have great brands that are recognized around the world. It helped them grow year by year and generate huge profits for their investors.
He focuses on these high quality companies and ignores low quality companies no matter how cheap they are. In fact, he once said:It’s much better to buy a great company at a fair price than to buy a great company at a great price.“”
If you need a £ 1,000 lump sum investment today, follow this advice. However, instead of choosing a winner based on evaluation alone, we want to find the best business in the market and focus on profitability, competitive advantage, and brand power.
Buffett also attaches great importance to the strength of the company’s management. He is looking for a very capable manager who can not only deal with everything the world throws at them, but also run the business from thick to thin.
They also tend to avoid commodity companies such as oil companies and mining companies. The reason he tends to leave the sector is simple. Commodity prices can fluctuate very much. As such, these companies should expect that it is best to have high prices and outperform production costs. It contains many guesswork that even Buffett may struggle with.
Using all of the above, I was able to put together an investment framework built on his advice. This framework is relatively simple. It suggests that I should only target stocks with strong managers, wide margins, strong competitive advantage and avoid resource companies.
With this framework in mind, I will invest £ 1,000 in companies such as: Unilever And Reckitt Ben Kieser.. Both of these companies Billions of dollars brands.. That is their competitive advantage. Experienced management teams also run them and, most importantly, they can set their own prices.
Of course, this strategy is not suitable for all investors. Finding a good company can be very difficult. Even Buffett sometimes makes a mistake. As such, he also advocates the use of low-cost passive index tracker funds for investors who may not have the time or experience to find an individual business. This strategy may be suitable for inexperienced investors.
But if you have an investment of £ 1,000 today, follow Buffett’s advice and buy Unilever and Reckitt Benquiser.