How to Invest Like Warren Buffett

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Where to invest for income Bank interest rates range from around 1.25% for “at call” bank deposits, to 3.0% for three year fixed term bank deposits, to 2.8% for 10 year Australian government bonds. Direct property investment in homes and apartments provide a net rental income yield of around 2.0%. Real Estate Investment Trus... read more
Three vital “high conviction” questions to ask before buying a stock There are three “high conviction” questions you need to ask before buying a stock: 1. Is this stock a better buy than adding to my existing holdings? 2. Would I sell some of my portfolio to invest in this stock? 3 .Would I be prepared to invest a sizeable... read more
Managed Fund Pitfalls “Money managers purposely work at manipulating numbers and deceiving investors. They’re selling the fund of fund stuff – it’s really unbelievable, piling on the layers of costs. But if they are good at marketing they don’t need to be good at anything else. The poor guy in the general public is getting ... read more
What does it mean to be Value-Focused and Risk-Adverse Value-Focused means we will only buy stocks we consider are reasonably priced relative to our assessment of their intrinsic, true or real value. Risk-Adverse means we will not buy stocks that we assess as overpriced, even if market sentiment favours them going higher (as happens in bu... read more
Investment advice, fees & bias unbiased investment adviser “The question of finding investment advisers is a hard one. Most advisers are far better at generating high fees than they are at generating high returns. In truth, their core competence is salesmanship.”  Warren Buffett  The Royal Commission into Misconduct in ... read more
Helping children to buy a home Saving a sufficient deposit for a home can be a challenge. We see parents helping children a lot. When buying a home the first rule is to stretch. Buy the most expensive home you can afford, for a number of reasons. Stamp duty is costly, so you do not want to change homes too often. The home you live in is c... read more
Index Funds & Exchange Traded Funds Index funds mechanically buy stocks in direct proportion to the stock’s value in the stock market, and they therefore mirror the market’s performance. They own a bit of everything, and therefore provide average returns. Historically the market has done well, so even average returns have been ... read more
Get your money’s worth The real question when you buy a stock is – “Am I getting my money’s worth?” This is one of Warren Buffett’s key principles. It focuses the decision making on the real issue of the value of the business being bought, and away from trying to guess what might happen in the market. It is unwise to pass ... read more
What is Intrinsic Value? There is an objective, determinable value for any investment, which is independent of the stock market. This is known as its intrinsic, real or true value, and is defined as “the discounted present value of all the cash that can be taken out of a business during its remaining life”. This universal value formul... read more
What makes a company a “value” investment? Following Warren Buffett there are various financial and qualitative characteristics a company must have to qualify as a “value” investment. These include: 1. An enduring competitive advantage The first question to ask about a company is : “What is its enduring competitive advantage?”... read more
Welcome to a wild world of robot investing The wild market gyrations are testimony to how computers now dominate the workings of the stock markets. Automated computer programs have changed how markets function. The US Securities and Exchange Commission estimates that these programs represent more than half of all US stock trades. Automat... read more
The case for optimism There have been three major periods in human communications. Up until the mid-1400s, illiteracy was the norm and life was difficult for nearly everyone. Information was expensive as storing it required memorising, or writing on parchment or clay tablets. In 1439 Johannes Gutenberg invented the printing press and revo... read more