Indore: Follow buffet rules to make money, earn more profit, reduce losses

Indore: Follow buffet rules to make money, earn more profit, reduce losses

A session on Wealth Management-‘The Warren Buffett Way of Investment’ held.

Manish UpadhyayUpdated: Wednesday, November 13, 2019, 11:00 PM IST
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Indore: By following the golden rules of Investment practiced by Warren Buffet one can generate more profits and reduce losses. As investors one probably won’t have an ownership interest in the companies in which he-she making the investment, but they can follow Buffett’s approach to earn more profits and minimize losses. Said Abhishek Bhatt, an expert of wealth management while addressing a session on a Wealth Management ‘The Warren Buffet Way’ here on Wednesday. The program was organized by Indore Management Association (IMA) at its Board Room at Jaal Auditorium.

Bhatt heads the Wealth Management Division at Arihant Capital Markets Limited. He has an astute knack for Financial Modeling, Financial Analysis and Risk Tolerance Assessments.

He summarized that first, analyze the business, not the market, the economy or sentiment. Next, look for a consistent operating history. Finally, use that data to ascertain whether the business has favorable long-term prospects.

Bhatt talked about the following points practiced by Warren Buffett which are simple to understand though may not be easy to implement.

* Never Compromise on Business Quality: It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. One needs to focus almost exclusively on purchasing high-quality companies with promising long-term opportunities for continued growth.

* Know the difference between Price and Value: Not recognizing differences between price and value is also what causes many investors to lose their shirts, as companies are just as often overpriced as they are underpriced.

* Over Diversification can be Dangerous: Most investors have experienced the poor results of over diversification. This is because over diversification lack the ability to concentrate on quality instead of quantity.

* Invest in Industries & Companies familiar to you: As investors, we believe it is possible to estimate a range of intrinsic value for a company based upon its financial statements and filings. This cannot be done, however, if you do not understand how a company makes money.

* Stay in Cash if necessary: It is important to tap into healing properties of nature by regularly keeping in touch with it. Moreover, religion also helps in finding closure to emotional issues.

* Focused Investing: Analyzes and pore over the underlying economics of a given business or group of businesses. If a company is doing what it takes to grow itself on a profitable basis, then the share price will ultimately take care of itself.

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