Key investing lessons from Warren Buffett’s playbook
A look at the key philosophies employed by the seasoned investor that can be emulated
August 16, 2020 / 10:50 AM IST
Warren Buffett (Image: Reuters)
Warren Buffett’s Berkshire Hathaway Inc said it sold shares of some of the largest United States' banks on August 14, slashing its stakes in Wells Fargo & Co and JPMorgan Chase & Co and exiting an investment in Goldman Sachs Group Inc.
In a regulatory filing detailing its US-listed investments as of June 30, Berkshire also disclosed a new 20.9 million share investment worth $563.6 million in Toronto-based Barrick Gold Corp, one of the world’s largest mining companies.
So, here’s a look at the key philosophies employed by the seasoned investor, who has amassed as much as $80 billion off his investment acumen, as per the The Motley Fool.
> Don’t stop building your cash pile: Buffett has notably continued to build his cash pile, a sum that was up by $10 billion to $147 billion at June-end from $137 billion in March-end – driven largely by sale of airlines stocks. Having a stockpile would be handy to make investments as and when the time is right. Make a move when a better opportunity presents itself.
> Invest in bank stocks: Buffett holds significant number of shares in American banking stocks and despite the adjustments, the big investor remains keen on the banking industry. He told investors in May that banks were well-capitalised and capable of weathering the coronavirus pandemic and also bought and retains huge stock worth $2.1 billion in Bank of America. Buffet is seemingly hopeful the sector will bounce back once economies strengthen.
> Keep to your area of expertise:
Buffett has history investing in sectors he knows from experience do well despite economic conditions or are likely to bounce back. The lesson here is to use your previous experiences to build future moves – when uncertain, stick to what you know.