Think like the best investor.
First, let define who is the best investor? Warren Buffet. You might actually disagree and we will rank them in an other post. But for now, let take him.
To be to the best investor, you practically have to do the best investment. Well. How do we define “the best investment”? The best risk-adjusted return. So if our investment get paid far more than any others investment for the risk taken, then it is the best investment. We are looking for out-liars.
So how do we do in practical term? Easy. Think like Warren Buffet. If you want to think like someone, you probably have to read the same books. From Buffett From 2012 Annual Letter, he advise to read
The Outsiders by William Thorndike Jr. – A book about CEOs who excelled at capital allocation.
Tap Dancing to Work: Warren Buffett on Practically Everything by Carol Loomis – Authored by Buffett’s longtime friend.
The Clash of Cultures: Investment vs Speculation by Jack Bogle – On how certain things have altered the concept of long-term investing
Investing Between the Lines: How to Make Smarter Decisions By Decoding CEO Communications by Laura Rittenhouse – In an age of ‘management speak’ this helps you read between the lines.
By the way, if you don’t trust me just follow Alex Bossert. He is 22 years old and has jut been awards Top Buy-Side Analyst by a social network for investment professional: based on current portfolio performance. Real fact. Alex starts trading at 10 years. He read hundred of books and followed the teachings of… Warren Buffet. Him, again!?
He started attending Berkshire Hathaway ’s Annual Meetings while still in middle school, making the trip each year to Nebraska with his father. He explained that his approach is to follow what smart investor do. And obviously, he keep an humble approach for now.
Good luck with your investment!
PS: As you know Buffet lives in the Omaha, Nebraska, home he bought for $31,500 more than 50 years ago. He doesn’t own a yacht because, as he puts it, “Most toys are just a pain in the neck.” When he married his second wife, rather than a lavish affair, it was a brief afternoon wedding at his daughter’s house in Omaha. He has also given billions of dollars to charitable causes and begged Washington to increase his taxes. Lesson learned: stay grounded and humble