Investing the Warren Buffett way involves thinking of your investments as a long-term relationship. His company, Berkshire Hathaway, holds positions in companies for years at a time. He doesn’t sell businesses that aren’t doing well. Rather, he looks for companies that will continue to grow for years.
Value investing
Warren Buffett is a champion of value investing, and you can learn from his example. Value investing requires an in-depth analysis of a company’s stability, fundamentals, and technical capabilities. It also involves identifying shares that are undervalued but with the potential to grow over time. Buffett recommends holding a stock for at least 10 years.
One of Buffett’s secrets is that investing in companies with low volatility is an excellent way to protect your investment from short-term volatility. If a stock falls too far, the price might not recover. It’s vital to keep an eye on your investment portfolio and to sell if necessary.
Berkshire Hathaway
Warren Buffett’s investment secret portfolio is worth $6.3 billion. While his trading activity is publicly disclosed through 13F filings with the Securities and Exchange Commission (SEC), his secret portfolio remains hidden from the public eye. While tracking some of his investment moves is possible, the details are limited. For example, his investment in General Re, valued at $22 billion, remains a mystery.
At the time, Buffett was 34 years old and had 2300 employees. He saw an opportunity to increase his return and change management. Later, Buffett stated that the purchase was a mistake. However, the outcome was positive for the public shareholders of Berkshire Hathaway.
American Express
In 1963, American Express suffered a major setback. The Salad Oil Scandal rocked the company’s stock. The scandal involved loans made to the company’s subsidiary, Allied Crude Vegetable Oil Refining. The company’s stock dropped by as much as 80%. But Buffett was not discouraged. He invested $13 million in the company, purchasing 5% of the stock for $35 to $38 a share.
Buffett’s investment in American Express has reaped massive returns for Berkshire. Today, American Express stock is worth nearly $27 billion. The bank’s stake is the third largest equity holding in Berkshire Hathaway. Buffett has been an American Express shareholder for over 40 years. In the mid-1960s, he poured 40 percent of the capital from his investment partnership into the company. In a 1980 letter to Berkshire shareholders, Buffett lauded the company as “one of a kind.”