How could I become the next Warren Buffett?

When looking for inspiration as an investor, there is no one better than Warren Buffett. Now 92, he has been a titan of the market for decades, succeeding in the best and worst times of the market through his guiding principles of investing.

Let’s see how I can succeed in the coming decades by applying these principles.

Who is Warren Buffett?

Warren Buffett is the CEO of Berkshire Hathaway, worth $644 billion. Nicknamed the Oracle of Omaha, he was a respected giant in the investment world, but began his investment journey in 1942 with just a few hundred dollars.

Buffett style

With decades of experience, Warren Buffett knows his style. He carefully researches undervalued companies with a quality business model, and is willing to continue investing for decades, until either the fundamentals of the company or the reason for investing changes.

Almost 50% of Berkshire Hathaway’s funds are centralized Apple and Bank of America. Investors should always look for long-term diversification, but when Warren Buffett finds quality companies at great prices, he is not afraid to invest heavily.

The opportunity comes very rarely. When it rains gold, put out a bucket, not a thimble.

– Warren Buffett

How can I invest like him?

Investors don’t need billions of dollars to invest like Warren Buffet. It can be as simple as finding quality companies below their intrinsic value, and holding onto that investment regardless of the volatility in the market. By understanding the fair value of a stock, and building an appropriate margin of safety, investors can be sure of their returns.

If you are not willing to own a stock for 10 years, don’t think about it for 10 minutes.

– Warren Buffett

For this long-term commitment, it needs to be well researched. This means understanding what the company does, why it’s unique, and how the business fundamentals are trending.

Warren Buffet’s style of research is all about knowing your own circle of competence. Why try to figure out new territory when you stick with what you know effectively? For some, this circle of competence may include understanding the potential impact of a product, or how a service can be ahead of the competition.

Investors hoping to become the next Buffett will also have to be comfortable with the crowd. When times are good, and the market is rising, it can be tempting to change your strategy. However, when the music stops, the price drop can be extreme. As a result, steady growth can be a more sustainable strategy.

This approach is the cornerstone of Buffett’s success:

Be afraid when others are greedy. Be greedy when others are afraid.

Can it be a value investor for me?

Being a value investor like Warren Buffett is not easy. It can be unfashionable to avoid the newest and most exciting companies, but because of the combined interests, companies that consistently buy less than they are worth can be profitable. One of Buffett’s largest holdings, Coca Cola has been in the portfolio for over 40 years. Since the first purchase in 1987, this investment has returned an incredible 5,900%.

If you can stick to one of Warren Buffett’s most famous quotes, you can never go wrong in the market: “

Rule No. 1 is never to lose money. Rule No. 2 don’t forget Rule No. 1.