5. Warren Buffett Stock Basics



Download Preston's 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location: http://www.amazon.com/gp/product/0982967624/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0982967624&linkCode=as2&tag=pypull-20&linkId=EOHYVY7DPUCW3WD4 http://www.amazon.com/gp/product/1939370159/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1939370159&linkCode=as2&tag=pypull-20&linkId=XRE5CA2QJ3I2OWSW In lesson five, we learned that Warren Buffett has four rules that he uses for investing in stocks. All the rules must be met in order for him to purchase shares of a company. Those four rules are the following: Rule 1: A stock must be stable and understandable Rule 2: A Stock must have long term prospects Rule 3: A Stock must be managed by vigilant leaders Rule 4: A Stock must be undervalued We also learned a very basic valuation technique that Warren Buffett used when he worked for Benjamin Graham. The technique multiplies the P/E ratio by the P/BV ratio and the result needs to be lower than 22.5. A key fundamental of Warren Buffett stock basics is the idea that the stock market is nothing more than a location where he can buy or sell his shares. The market only provides a platform for him to purchase undervalued companies. He always buys on the assumption that they stock market could close tomorrow and not open for five years ñ and it would have no impact on his decision to buy a particular company. Finally, we learned that Warren Buffett possess great patience. He never tries to make enormous gains, but instead consistent gains at reasonable levels. He always thinks for himself and always determines the value of a stock based on what HE thinks a company is worth - not the market.

Comments

  1. Hi Preston so far iv'e watched the first 5 videos and thet are all grea!! i have been trying toread Graham's book translated to Hebrew but since i have no financial background i had reall hard time understanding what he was talking about, and your videos really start with the basic concept that make everything look simple and undestnadable, so THANKS!!
  2. What if the numbers are negative (P/E, P/BV etc.)?
  3. all i can say is thank you 😙
  4. Because of this video i bought Seadrill Partners at 3.42 2 days ago and now the price of that company is 3.67 and still is getting much more stronger thanks to Preston and Mr.Buffett
  5. Brilliant
  6. Someone help, if his book value is 14.3.... whats his safety?
  7. Sir you have made very nice and informative videos, Sir I a question, Today i see a stock having P/E= 4.72, P/B=0.18 but it is showing networth of 2989 Cr, Debt 4798, please more elaborate things
  8. sir, may i know about the books which help me to know more about stocks and shares being a beginner.
  9. Fantastic video! well researched and explained.
  10. Hi, where can I find the second course?
    Thanks.
  11. These videos are so valuable Preston. Many thanks!
  12. You r the superstar...
  13. Thank you so much for sharing your experience and skills and knowledge and so helpful I am really interested in this video on YouTube channel loved it I am really want to learn more about increase Money's
  14. Great video!!! Thank you
  15. Hey Preston, I don't understand how to compute the book value. Some tickers will give you the book value online but some don't. Could you help me out?
  16. Holy , thank you very much sir ! I can't believe all of this course are free !! May god bless you and your family !
  17. what do you think of EVA?...is that important to assess a company's value or is it irrelevant?...i want. to start my career as an investor initially in small businesses.
  18. So if i want to have success in investment i must look incessantly for a lot of financial statements of various companies,what about companies that are for sale but are not in any stockmarket,like accounting firms or nightclubs,this approach would also work?
  19. The back ground music is irritating.
  20. I love this, I haven't yet read Benjamin Grahams book or anything on Buffet but this has already been my strategy and it has paid off great for me.


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