What Made Me to Become a Warren Buffett Follower

Article by Sherin Dev; Follow me in Twitter or Facebook


Become a follower of anyone is simple. If we ask to anyone to know to whom he or she follows, we will get a definite answer. But, following of a person does make any changes to our life? This is the real question. If there is no change in our life by adapting some virtues of the person to whom we follow, we are lying to a great extend. I am sure; I am not a person who blindly tells following anybody or having a person as role model as if I am not able to adapt some of the good qualities of that person to my life.

But, I still follow Warren Buffett. Why? Because three most qualities of Buffett that attracted me are he is simple, disciplined and have no greed to money. Buffett love to see how money grows than creating wealth and enjoy its glory. His lifestyle shows the simplicity and growth as third richest person in the word shows hoe disciplined he is.

There are number of books including some of the bestsellers available in the market, all of them about Warren Buffet, his style and growth path. However, none of them have any trusted authenticity as Buffett still not opened his mind to anyone to tell about his style and secret, if he has such. I believe the success highly related to three cornerstones: passion, hard work and discipline. Some of the Buffett focused writers like Robert G. Hagstrom and Marry Buffett have claimed in their books, which have sufficient information about the investment approach of Warren Buffett and tips and tricks on how he valuating business to invest. They are of course, good books to read. However, Buffett have not agreed or disagreed with those writings. This shows these books may or may not have Buffett success secrets. These books are good to read with the information it provides. But, never able to tell whether it completely reveals the total approach and styles of Warren Buffett.

Do we able to imitate Buffett to get the same success he has? I believe it is impossible. Some of the great guides like "Common Stocks and Uncommon Profits" by Philip Fisher got Buffett's interests as it shows some of the best point to analyze business. Of course Warren may using some of this ideas but still not able to say how deep he using it. A true follower should not imitate buffet, but should learn how he got such huge success and try for it as their own by creating their own systems. Reading the circle of competency would help intelligent t followers to create such system that works better for them.

Books on Warren Buffett such as "Buffett: The Making of an American Capitalist" and "The Snowball: Warren Buffett and the Business of Life" are highly helpful to get an insight to the life and business style of Warren Buffett. As a follower, one should read such books to understand Buffett more closely. Those who are looking for the most admired books from Warren Buffett should go behind "The Intelligent Investor" and "Security Analysis" by Benjamin Graham. Both books gave lots of attraction to Buffett and some time we can easily say those books helped him a lot to develop his strategy that lead him to the ultimate success later.

I have read and admired another books on Buffet that not written anything about his investment style or approach, but total about his management style. What I Learned Before I Sold to Warren Buffett by Barnett C. Helzberg Jr have lots of meal to Buffett follower to get an idea about Buffett's management style.

A pronounced follower of Warren Buffet never going to get anything once if he blindly follow him or read all the books available about him. Instead, a true follower shouldn't spend much time by reading all the books that not have trusted authenticity but, set realistic goals like Buffett has. My high recommendation to know more about the Buffett style is through reading the Annual Reports of Berkshire Hathaway, where Buffett as the chairman. This library is easily accessible from Berkshire site and it have almost all about Buffett's view, style, approach.

Any true comments?

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Protect Portfolio with Gold

Article written by Sherin Dev; Join my Twitter or Facebook


Do you feel insecure about your investment portfolio? Worries more about market fluctuations, recessions, inflation, losing currency values etc and looking for some investment that protect your money against all these causes, then you should protect your portfolio with gold by allocating 10 to 15% of capital in it.

Diversify and Protect Portfolio with Gold

It is proven that gold allocation plays perfect role to protect investment portfolio by guaranteeing the savings and increasing the level of investment. How gold gains such capacity to protect our money. It is a worthwhile hedge against negative events such as stock-market downturns, strong inflation or a weakening currency. Demand for gold moves up in uncertain times because investors see it as a haven. Here are some valid reasons to understand the real power of gold.

Gold Never Loses Value

If you have gold in hand, you are safe. Never mind whether it is a recession, market down turn, inflation, deflation or currency value fluctuations. Your gold will be intact in value, anywhere in the world, and would fetch you financial happiness. Increasing gold prices during last recession was the best example on how world rely on it to protect money. This is why almost all the countries in the world increasing its gold reserves to protect their economy. Gold has maintained its value in terms of real purchasing power in the long run and is thus particularly suited to form part of central banks' reserves. In contrast, paper currencies always lose value in the long run and often in the short term as well.

Gold Protects Against Inflation

Gold is the only investment that protects our self from inflation or deflation related causes. Whether it is inflation or not, gold’s value will be adjusted according to and money invested in gold ensures same or more value.

“The value of gold, in terms of the real goods and services that it can buy, has remained largely stable for many years. In 1900, the gold price was $20.67/oz, which equates to about $503/oz in today's prices. In the five years to end-December 2008, the price of gold averaged around $606. So the real price of gold has endured a century characterized by sweeping change and repeated geopolitical shocks and more than retained its purchasing power. In contrast, the real value of most currencies has generally declined.”

Market cycles come and go. Over the long term, through both inflationary and deflationary periods, gold has consistently maintained its purchasing power.

Helps to Diversify Portfolio

Asset allocation is an important aspect of any investment strategy. By balancing asset classes of different correlations, investors hope to maximize returns and minimize risk. Gold offers enhanced diversification opportunities relative to many alternative assets. Alternative assets and traditional diversifiers often fail during times of market stress or instability, even a small allocation to gold may significantly improve the consistency of portfolio performance during both stable and unstable financial periods.

In the short run, gold can deviate from its long-run inflation-hedge price and can offer opportunities for impressive returns.

Gold Is Risk Free

Financial instruments generally carry three major risks: Credit, Liquidity and Market. Credit risk is where a debtor will not pay. Liquidity risk causes the seller not able to find a buyer and the item remains never sold. Market risk causes the prices would fall by changing market conditions.

Gold is unique in that it does not carry a credit risk. Unlike a currency, the value of gold cannot be affected by the economic policies or undermined by inflation in that country. Gold market is deep and liquid, as demonstrated by the fact that gold can be traded at narrower spreads and more rapidly than many competing diversifiers or even mainstream investments.

Gold is of course subject to market risk, as is clear from the experience of the 1980s when the gold price declined sharply. But many of the downside risks associated with the gold price is very different to the risks associated with other assets, a factor which enhances gold's attractiveness as a portfolio diversifier.

Gold for Emergency

Gold works as a best option to meet emergencies. Emergencies always required liquid money. Owning gold is thus an option against an unknown future. Gold is liquid and is universally acceptable as a means of payment. It can also serve as collateral for borrowing.

Gold as Source of Income

Gold is sometimes described as a non income-earning asset. This is untrue. Gold can also be traded to generate profits. There may be an "opportunity cost" of holding gold but, in a world of low interest rates, this is less than is often thought. The other advantages of gold may well offset any such costs.

Invest Physically or Virtually

Investors have many options to purchase gold as physical or virtual. Physical options to purchase gold are jewellery and ornaments, certifed gold bars, gold coins etc.. Virtual options including Gold Exchange Traded Funds (ETF), purchasing stocks of Mining companies, gold certificates, gold futures and gold oriented mutual funds and fund of funds.

Conclusion

If you want to protect yourself against inflation, deflation, stock market weakness, economic slowdowns, recessions and potential currency problems, in other words, if you want to hedge financial uncertainties, there is only one portfolio item that will serve you in all seasons and under most circumstances - Gold.

Further References:

1. Wikipedia Gold as an investment
2. World Gold Council

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Role of Debt Investments in a Portfolio

Article written by Sherin Dev; Follow my Twitter or Facebook page

Any investment instrument that provide fixed income and safety against capital lose can define as debt instrument. In my previous article, Investment Portfolio for Beginners, you are able to find the requirements of having debt instruments in a portfolio along with its role and importance. This article justifies those points by elaborating the reasons why one should add debt instruments to the portfolio and what are the major benefits from it.

People generally love to have instruments that grow the money fast. Financial advisers prefer equity investments to build wealth for a long run. I too agree. But, meant only for long run, selling equity investments early would bring capital loses to the investors. What would happen if I have short term goals and equity or such investments never able to meet those goals? Here is the role of debt instruments. Below are some points that helpful to know hoe debt instruments are able to help us to meet short term goals.

Money in Debt Instruments are Safe

Most of the debt instruments are backed by governments or have regulatory appointed by government. Thus the money invested with debt instruments provides high safety and liquidity. Investor can sell or redeem the instruments whenever they required money. Bank Fixed Deposits and Government Bonds all comes to the debt instrument group. Some mutual funds like Liquid funds are also considered as debt funds. Through its superior guarantee and liquidity, having debt funds in a portfolio would help to meet short term goals.

A Friend to Low Risk Seeking Individuals

Debt funds have the ability to protect capital. This nature makes debts funds a best friend to the people who have less risk taking capacity. It doesn’t provide the money growth like equity, gold or real estate but, always give a guarantee on the capital invested in it.

Save tax through debt route

In a previous article you may have noticed that I wrote a portfolio should include tax saving instruments. Depends of the low in various countries, investments to selected debt funds are helpful to save tax to a great extend. However, individuals required to identify best debt options to avail tax benefits under the low of the country where they belongs to.

Availability of Systematic Investment Options

Mutual funds like debt and gilt funds have choice to invest money at a time or systematically. Availability of systematic investment option is helpful to those who are near to retirement or have particular goal to in a stipulated time. If such goals fall within 5 years, taking the route of systematic investment is the best option to build required capital over the period of time, systematically.

Work as an Emergency Fund within Portfolio

No one knows the arrival of emergencies to the life. Having an emergency fund is the best advisable option to meet any uncertainties and debt instruments are able to work better for that. Through its high liquidity nature, investments in debt instruments are suitable for individuals to raise immediate money to meet emergencies. Debts instruments have triple benefits: It would work as an emergency fund, would fetch more interests than savings account and protect against any possible lose of capital.

Conclusion

Debt instruments have important role in a portfolio. It generally provides capital safety and high liquidity. Including quality debt investments in a portfolio helpful to save tax, work as an emergency fund, meet short term goals etc… Debt instruments are the best friend for people who have low risk taking capacity and near or after the retirement. It also best to receive regular income if invest wisely to the fund which offers that facility like monthly income plans.

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Work in Mutual Trust and Benefit - Time to Reward Commentators

Prepared by Sherin Dev; Follow me in Twitter or Facebook


Again this is the time to reward readers, visitors and commentators. As I don't have much time to work, I have added a link to the sites where the commentators belongs too. This list may not included some of the commentators as I have found their blog is dead or left as not updated for long time. It also not included people who don't have a blog or I am not able to trace them.

This is a list I have added with a 'nofollow' tag. However, any of the people from this list can contact me directly if they want to remove that tag to get better traffic to their site.

Keiran - Finance Wzards
Era of Islamic Finance
rv rentals arizona
Blackhawk Partners
A Life Less Beautiful
Belmont Thornton

photographe professionnel
Penny Stocks
seo gybe
Personal Fn
Jennire from Tools for Credit Repair
Alex from 0balancetransferscreditcards

PalmDale Homes
Gallant FX
prperty management company
heyithinkthisway
Finance Questionnaires
discount code

flowers kolkata
Michel Johnson
cynthia1
Lisabeth
Dan
stock market for beginners
Healthy Living For Life
John from World Vitamins Online

I am again keeping my promise intact when adding this list in my blog as a tribute to visitors, especially commentators. To add your site or blog to the next list, I would not be able to do so without getting the information accessible to me. To get information, I required you to frequently visit and comment in my blog.

I seek your support and also like to hear from each of the visitors. Keep in touch to work in mutual trust and benifit

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Why It’s Cool to Go Organic (Growth)

Editor’s note: This article is written by Justin Teo of Investrepreneurship

It’s no secret that we all want to see growth from the companies we bought stock in. Generally, companies can either grow organically or grow through acquisitions. In this article, I will highlight some of the reasons why growth contributed by improved sales from current operations or organic growth is better than growth contributed by buying other companies.

Organic growth can be bought by simply investing lots of money in opening new stores, advertising, and etc. Growing sales and profits by 10% through putting an additional 50% more capital to work isn’t really a great thing. True, companies need to invest to growth, but management should always consider the return on investment in whatever expenditures they make, and always focus on achieving a good return on shareholder’s equity. In this article, we will assume that organic growth is reasonably profitable.

Paying a Premium

When trying to acquire quality companies, the acquiring company might need to pay a price that is higher than the intrinsic value of the company targeted for acquisition. Sometimes, the premium paid can be quite large, and may result in significant goodwill write downs and losses in the future.

Taking on More Debt or Issuing More Stock

Unless the company is an Apple or a Microsoft and have lots of cash lying on the balance sheet, it probably would have to take on debt or dilute shareholders by issuing more stock to finance its high-value acquisitions. As we all know, neither issuing more stock nor taking on a lot of debt is a good thing.

Culture Clash

Different companies have different cultures, and it can be a challenge for a company to integrate its new employees from a company it has acquired to its culture. This can result in conflict and lower productivity. In some cases, the culture clash can be so bad, that some key employees, employees that made the acquired company great in the first place, decide to leave; this can significantly impair the intrinsic value of the investment made by the acquiring company.

Opportunity Cost

For fast-growing companies, it is better to focus on growing their current operations than it is to be focusing on buying other lower-growth companies. So, unless the acquisition has strategic value, it doesn’t make sense for such companies to channel their efforts into looking for acquisitions to accelerate growth when they can just put their efforts into growing their core businesses.

By spending money on acquisitions and not reinvesting in its own operations, good growth companies can not only really set their long-term growth rate back, but might miss out entirely on the opportunity for growth presented by their core businesses, due to their rivals taking market-share when they weren’t focusing on their own operations.

Conclusion

I’m not saying that acquisitions are bad; acquisitions that make good strategic sense and made at the right price can create long-term shareholder value. I’m just saying that organic growth is key, as reasonably profitable organic growth comes as a result of managerial expertise and cannot be easily bought.

If you like this article, you might want to check out some of the things I think about when evaluating a stock here, or maybe even just drop by my blog for a bit. Thanks for reading, and may you always sustain good returns on your portfolio.

Justin Teo is a private investor and is currently studying for his degree in international business. Investrepreneurship is a blog about investing, entrepreneurship, and business in general. You can subscribe to Investrepreneur’s feed here.

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Investment Portfolio for Beginners

Article written by Sherin Dev; Follow me in Twitter or Facebook

Thinking about an investment portfolio is simple and interesting. But, having an investment portfolio is difficult. High degree of preparations, timely action on various factors, identifies time to do necessary workarounds regularly are some of the biggest tasks associated with the creation and maintenance of an investment portfolio. Another big deal is identification of present status, goals and instruments that meet all the requirements. Once dealt with all these, completed half way of the investment portfolio creation process. This article deals with the difficult parts when creating an investment portfolio. This would not go to cover all factors associated to the portfolio creation, but surly give a better insight to the areas where one certainly focus when deals with investment portfolio.

Portfolio creation should start with self assessment and status check. One should als get required knowledge on what it means and where, how to start. Must identify the goals at various duration and able to understand the instruments to meet that goals. Be aware about the risks associated to each and identify parallel solutions to meet such risks boldly. Here are some instruments that generally required in a portfolio, give you better idea when proceeding with.

Tax saving instruments

If you are an employee and status falls to huge tax bracket, this would be your first option. Identify best tax saving instruments that appreciate well in long time. Adding such instruments give double benefits, tax saving and growth of wealth, in the same time. Getting assistance from experts would help to identify the right instruments.

Insurance products

Naturally insurance products would be there in the portfolio. This would not work as an investment option but, work well as a protector of wealth and/or future. One should assess self to identify what insurance coverage you, family, assets required and from where to subscribe the same. Having policies like term insurance policies, medical insurance policies, protection policies against theft, calamities, protecting assets should be planned well and added to the portfolio to live good. Industry experienced insurance planners would give great assistance to analyze, identify right policies and vendors to meet these requirements.

Liquid and Debt instruments

Liquid and debt instruments have huge importance in the portfolio. Identifying the same is bit difficult, but through research and study, one can easily identify what he required to add in his portfolio based on requirements, goals and status. Having liquid and debt funds is an excellent way to meet immediate money requirement as it would work as a good emergency fund for you within a portfolio.

Gold

Gold is always a good investment. Considering its power to beat inflation and high market demand, investments in gold would be certainly a best idea. Once can invest in gold in the form of physical gold such as ornaments, bars and coins or in the form of Gold Exchange Traded Funds (ETF) or even adding gold mutual funds. Gold commodities are also a good option those who are more familiar with commodity markets.

Real Estate

Real Estate doesn't have any capability to protect against recession and it fluctuates always. However it has its own privilege of getting high appreciation time to time. Investments in real estate are a good option for those who are creating investment portfolio for long time. Have learned from the past experiences that, real estate prices are skyrocketing moment to moment. Investors can buy real estate in the form of plots, flats, individual houses or subscribe to Real Estate Investment Trust funds (REIT). Real estate investments are also a good option for those who are not getting enough sleep by thinking about raising inflation.

Equity instruments

Naturally, this is the best option for investors who have long term investment focus. In my personal opinion, none of the portfolios are perfect without having investments in stocks or stock related investments i.e. mutual funds, Exchange Traded funds etc. People may have enough knowledge to invest any of the instruments mentioned above but investment in stock required good study, research to get required knowledge first. One also considers his age, financial status, risk taking capacity when plans to move with direct equity investments. I have written number of best article in this blog to provide such knowledge to those who have real interest to become a direct stock investor.

Conclusion

Creation of an own portfolio is always a good decision to all future focused individuals. Right knowledge, home work, good analytical ability with getting advices from right people would add spices to ones portfolio to bring it as a big success. Having right goals for long, medium and short term and preparing a portfolio with right mix up to meet all that goals can be considered as a right one. Wish all the best to all who read this article and plan to have a portfolio as their own.

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