Buffett never predicts market trends. Learn from the master.

1. Owning stocks is equivalent to owning a business

Real business owners don't care about stock price fluctuations, they only care about corporate earnings and growth. But how many people only look at the fluctuations in the stock price of companies? And regard these fluctuations as changes in the true value of the company?

2. Don't predict market trends

Buffett only relies on knowledge and experience to judge the companies and stock markets he invests in, and he is fully prepared. He never looks at technical analysis and tells you whether the stock market will rise or fall. He believes that the future is difficult to predict, especially in the short-term future, we often know nothing. But how many people are chasing news every day, trying to hear other people’s predictions, or making predictions by themselves?

3. The falling trend will pass eventually

When the market is pessimistic, unreasonably low prices will often appear, but the stock price will still reasonably reflect the company's earnings one day. But how many people sold their holdings out of fear or economic distress during the downturn?

4. Don't buy if you don't understand

Buffett doesn't buy technology stocks, because technology changes too fast and elusive. I started buying Apple stock in 2017 because its business is already mature and stable, and it has turned to service-oriented, which will have stable cash flow. He likes consumer goods companies, such as Coca-Cola, which lasts for a hundred years; and Gillette razors, where every man needs to shave every morning.

5. Don't buy if it isn't cheap

Buffett is Benjamin. Believers of Benjamin Graham's "value investing", buying stocks emphasizes that its intrinsic value is far greater than the price; therefore, Buffett often said: "The price is the price you pay, and the value is what you get."

Graham once said: "There are two rules of investment: one is not to lose money; the other is not to forget the first rule." Therefore Graham only buys stocks with a "margin of safety", usually he will be less than three points The second is to buy stocks of a certain company with the value of net assets, or to focus on stocks with lower cost-earnings.

It is the best time to buy when the stock market crashes. People forsake me, Buffett once said: "The investment mistake that most people make is "greed when you should be fearful, and fear when you should be greedy!" So Buffett doesn't care about short-term market fluctuations, and only focuses on the long-term returns of stocks. He believes that market volatility is like a friend, not an enemy. Profit from the stupidity of others instead of following the ups and downs of the market.

6. Concentration rather than dispersion

General investment theories emphasize diversification of risks, so "do not put eggs in the same basket", but Buffett disagrees, he believes that concentrated investment is the way to make money. If you can choose investment targets carefully and buy companies or stocks with value for money, when every investment can become a golden chicken, why diversify!

About Buffett

Warren Edward Buffett, born in Omaha, Nebraska, is an investor, entrepreneur and philanthropist. He sent newspapers in his childhood, selling chewing gum and Coca-Cola from house to house. He bought his first stock when he was 11 years old and then taught himself accounting.

Buffett is Berkshire Hathaway’s largest shareholder, chairman and chief executive officer. He is known for his long-term value investment and simple life. Ranked No. 1 among the world's richest people in 2008 and No. 2 in 2017. He is also a well-known philanthropist and promised to donate 99% of his wealth, mainly to the Bill and Melinda Gates Foundation. Buffett's charitable donation set a record in the history of the United States.