Warren Buffett's Method to Making Money in Stocks

Warren Buffett is considered to be the Greatest Investor of All Time. His investment approach is not glamorous or eye-catching; he doesn't jump from big hype stock to big hype stock. Instead, he invests in businesses that have simple products that people don't want to live without, and he holds on to them for a very long time.

Buffett is not interested in the "next big thing" (and all the speculation and hype that goes along with it). He does not chart stock prices nor try to capitalize on small day-to-day stock market movements.

His primary concern is simple: What is a good business really worth, and at what price can he get its stock. Buffett's approach to choosing stocks is not difficult, yet most investors would not follow it. His method requires you to be rational and unemotional in your decision-making (which most people fail at doing). Buffett's strategy is: Buy with great care and hold for a long time.

This course will take you through the methodology that Buffett uses to:

1. Choose the right company to invest in. It must

   • have a durable competitive advantage,

   • be financially secure,

   • keep growing year after year,

   • have great management, and

   • give excellent returns on an investment.

     
     

2. Determine the rate of return to expect on your investment if you buy the stock (with two different approaches):

   • using the historical Return on Equity data

   • using the historical Earnings per Share data.

The main goal is to choose a solid, financially sound company that is priced low enough to give a high rate of return over the long term.