Warren Buffet: Investing with Intelligence and Patience

Warren Buffet is one of the luminaries in the stock investing world. His name is linked to successful investing. Even though Buffett's net worth is now around $42 billion, he made his first steps by forming a partnership and investing as little as $100.

The interesting thing is that when he first started in 1956, Buffett was not a player on the Wall Street, but instead executed his trades from Omaha, Nebraska. He has not used any computers and he didn't take advantage of the opportunities of technology stocks, but still managed to accumulate this wealth.

Most experts put Buffett in the value investing category. This means that he targeted undervalued stocks that have been neglected by the market. He purchased them below their real value and held them over the long-term. As a result he benefited the corrections of the market and sold them at a price far above what he has bought them.

On the other hand, stock bargains were not the only thing that Buffett looked for. He stressed the importance of quality as well.

Buffett was lucky enough to possess the quality of finding stocks that others regarded as unprofitable but still had the potential of success. Many experts try to analyze the reasons behind Buffett's success. Many attribute it to his luck, whereas others linked it to a well-developed strategy.

In one of his books, called "The Warren Buffett Way", Robert Hagstrom aims to explain Buffet's investing manner and reasons for success. The book quickly turned into a bestseller for several weeks, managing to sell millions of copies.

The idea behind the writings of Hagstrom is that investors cannot do exactly what Buffett did and achieve his results due to the sophistication. However, Buffett refuted this by claiming that nothing was impossible and investors can still take him as a model for investing.

"The Warren Buffett Way" was later revised and issued in a second edition.

The outstanding first steps in the investing world are explained in the first part of the book. Hagstrom illustrates the successful formation of a small investment partnership, which led to the acquirement of the first business of Buffet, namely Berkshire Hathaway. How the company was turned from an ailing textile enterprise to a successful business is explained. Thanks to Buffet, Berkshire Hathaway was transformed from a $22 million business to a $69 billion successful company.

The first steps of Buffett in the investing world were used to provide an explanation on the formation of the investing philosophy of Buffett.

Hagstrom manages to identify 12 principles that are found in almost every investment undertaking of Buffett concerning the picking of stocks and even entire companies. The 12 principles explained by Hagstrom are understandable, but most investors may find them difficult to execute.

Buffett is popular with his patience, ready to wait until it is necessary for the fruits of his investment to come up. He managed to do all the preliminary analysis even without the assistance of a computer program. This provided him with knowledge of the business he was about to cure. This seems almost unattainable to most investors, who want someone else to do the dirty job for them.

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