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Warren Buffett Secrets To The Stock Market - Mike Swanson (08/20/09)

World wide the Warren Buffet strategy is known for being very successful in stock picks. His value investment philosophy is from the Benjamin Graham school, and in 1965 he invested $10000 in Berkshire Hathaway. Today this investment is worth nearly $30 million! Had he taken the same amount of money and invested it in the "S & P 500" it would have grown, however the same investment would only be worth around $500 000.

The legend that is Warren Buffet has grown to such a degree as to almost appear mythical. His philosophy of value investing has him pursuing bargains, much like a bargain hunter might and this is how he makes his millions. He sees value in certain stocks which other people can't. The products he purchases are under-valued, so they don't attract other investors.

Undervalued stocks don't normally attract investors, but their low worth is what attracts Warren Buffet. He is able to predict what they will be worth by analyzing the fundamentals of the business, and this is what helps him to predict that the market will eventually favor his stocks. It's all about making money.

Supply and demand do not concern him in the least, although traditionally this is what controls a market. Warren Buffet wants long term returns not capital gains. His famous quote for the stock markets beginners "In the short term the market is a popularity contest; in he long term it is a weighing machine" says it all.

Stocks are selected based on the company's overall potential, so he looks at this as a whole entity, and sees investing as a long term prospect for making money. Warren Buffet looks for ownership and not capital gain, and his concerns are relevant to how well a company is able to make money. A list of the 50 hottest stocks is useful.

The relationship between a company's level of excellence and it stock price is integral to any investment opportunity Warren Buffet looks at. He has a series of in-depth questions that he asks himself in order to asses an investment opportunity. He admires companies which avoid excessive debt, and it is relevant to him if a company has a product which is dependent upon commodities. There are also many other considerations, but anyone wanting to invest, would do well to take a page from the book of Warren Buffet.

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