The Best Stock Market Advice from Warren Buffet

Warren Buffett Best Stock Market Advice

If in case you have never heard about Warren Buffett, he is one of the best stock investors who has ever lived. He lives in Omaha, Nebraska.

He literally started with $ 200,000 dollars as investment capital. Half of the money came from his family and friends and half of the money is his own personal capital. Currently, he was able to grow the money through investing in stocks and other securities and has a net worth of $76 Billion.

According to Market Insider, if you have invested $1,000 in 1964, when Buffett took over Berkshire Hathaway when the shares  were just $19, it would be worth about $13 million today. That is a whooping 13,000x or 1,300,000%.

Mind boggling!

Nakakahilo di ba…..

No one has ever done that before and I guess no one will ever will. For such a feat, he is known as the wizard of Omaha.

Kaya naman pag dating sa investing, when Warren speaks, the whole investing world listens.

Here are some of the best stock market advice from the investment genius of Omaha:

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Fearful and Greedy

Sa madaling sabi, ang pinakamagandang panahon na bumili ng stocks is during the time when the Philippine stock market crashed and goes down. Yon tipong, pulang pula ang mga stock portofolio kasi bumagsak ang presyo. At habang ang lahat ay natatakot bumili at nagluluksa, ikaw naman ay tuwang tuwa sa kakabili ng mga stocks na naka SALE.  

There is a known stock market idiom that says, “Buy stocks when there is blood in the street”.

At ang pinakamagandang time para magbenta? Kung ang lahat ay tuwang tuwa dahil ang stocks ay all time high. Yon tipong PSE index is going to break again another milestone. Pag ang lahat ay tuwang tuwa sa pag akyat ng stocks, bentahan na. 🙂

Price is what you pay. Value is what you get.”

Stock Price vs Stock Value

There are two aspects of stocks. Yong value ng company who owns the stocks at ang presyo ng stocks ng company. It is possible that the company earnings are good (high value) pero mura ang stocks (low price). It is also possible that the company earnings are not good or the company has internal issues that affect their productivity and profitability (low value) pero mahal ang stocks (high price).

The wise and intelligent investor buys when the company profits are great (high value) and the stock price is low (low price). He sells when it is the other way around.

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

There are some things that need reasonable time to grow. For example, you need nine months for a child to be born. Hindi pwedeng you find 9 women to carry the child in their womb for the child to be born after 1 month. So for value investors like Warren Buffett, they trade with a long horizon to give the stocks a reasonable time to grow.

“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”

An intelligent investor is not speculative. Hindi sugarol. Ang importante sa kanya bago ang lahat ay sigurhin ang kanyang capital. Kaya bago mag invest, pinag aaralan ang company na kanyang bibilhin.

During the early 2000, the world was laughing at Warren since he is not investing into dot com companies. During that time, the dot com companies were at all time high. They were laughing at Warren at kinuktya kasi napag iwanan siya sa pansitan.

But Warren did not invest in dot com companies since he stick to what he knows best. He only invests in businesses that he can understand.

After two years, the dot com companies crash. There were so many who lose lots of money overnight. Warren was right.

Right now, I feel the same for bitcoin. At this time, people talk about it everywhere. But like Warren I stick to what I know. I don’t mind missing the boat. So for bitcoin, pass ako.

Risk comes from not knowing what you’re doing.”

Stock Market Risky

Probably narining niyo na rin ito. Stock market, di ba risky yan? Mag bank ka na lang. Sure money! Risky talaga ang stock market if you don’t know what you are doing. But if you know what you are doing, mas risky ang bank. Inflation will eat your money away!

“It’s only when the tide goes out that you discover who’s been swimming naked.”

Few years ago, when I started investing in stocks, I started at the right time. That was the beginning of a bull run when stock market is going up. Kahit anong stocks ang bibilhin mo, kikita ka. Akala ko magaling ako. But pride precedes the downfall of a man.
I invested in some stocks that I never know. When the market turn around, bye bye. I lose some money.
The true great stock investor is somebody who survived and thrived on several cycles of stock market as it goes up, down, up and down.

 “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

We need to remember always that we just don’t buy stocks (piece of paper). We buy the business behind the stocks. It is alarming when I hear somebody saying, bili tayo nito napakamura, centavos lang ang presyo. Yong centavos na yan pwedeng maging zero lalo na pag ang mining stocks na binili mo, wala ng mapag minahan or walang ore na makita sa lugar.

“Our favorite holding period is forever.”

Stock Market is ForeverStock Market is ForeverDo you know what is one of the reasons why people lose money in stock market? Too much buying and selling! Short term traders have more difficulty in earning from stocks because of the fees and taxes they pay every time they buy and sell stocks.

But for long term investors like us, no worries. We are in this investment for the long term….

So that’s it. Thanks to Warren Buffett for his wisdom. Listening and learning from this genius of Omaha can make us a better Philippine stock market investor.