How Warren Buffett Makes Instant Money On His Investments? Master His Method.

April 29, 2014

How Warren Buffett Makes Instant Money On His Investments? Master His Method.

Good morning friends. It’s always a pleasure to learn from the master. It’s more pleasurable when I share with you all. Let me deal with one of his most repeated and quoted sentences.

Mr.Buffett has been quoted saying, “I am perfectly okay, if after my investments, market close for 10 years.”

I have often quoted this sentence in my past articles. But have you ever thought how can he say like this? As we know, he is investing billions of dollars in a single company. If the market closes after his investments, what will happen to his billions? What will happen to his return on investments? How will he get out?

If you go little deeper, you will also find him saying that “I invest based on past track record. Future is unknown. Future can not be controlled by anybody”. He does not predict the market. Why? What is his secret?

His secret is the PRESENT. Yes, he invests in Present Moment. He considers the present as the most controllable time and he uses the same to his advantages. When he invests in present……so, he makes money also in present. He is not bothered about future market, future price or market remain open or closed. How?

His Secret (Read and Master):-

Based on the past track record he works out the Fair value of the company. He tries to buy stocks below fair value. When he does that, he makes his money instantly. E.g. If his calculations show that fair value of Xyz company is Rs.100 and the market price of the same is at Rs.50……he does not need an MBA degree to buy this stock.

When his buy this stock at Rs.50, he has made 100% gain instantly!! Will it make any difference to him if market closes the next day? He has already doubled his money the day he invested!!

In the course of time market price may or may not cross the fair value of the company. But when it crosses, he will make tons of money in future also!!

What happens in Reality?

When you follow his method out of 10 stocks……5-7 stocks will not cross the fair value. They may give him losses or average return. But 3-4 stocks will give him super normal return which will take care of the entire investments of 5-7 stocks plus he earns a decent return on overall investments.

If you study his portfolio, it has around 200 companies……just 20 odd companies have made him what he is today!!

Indian Experience:-

Now look at Mr.Rakesh in India. In 2011, market value of his investment was Rs.3249 Crs in about 31 companies. Out of this Rs.2191Crs. were invested in just 3 companies…i.e.67.44%, the companies are Titan...Rs.1338Crs., Lupin…Rs.538Crs. and Crisil…Rs.315 Crs.

Just 3 companies out of 31 made him The Rakesh.

My Personal Call:-

At destiny management we follow this model only. That is the reason we request our clients to be with us for at least 3 years. Our track record from 1996, shows that those who remain with us for 3 years, they have never left us. They have prospered with us. They become our family members.

What Next?

If you love making money with peace of mind, we suggest you join us. The market till 2017 looks positive.

Wish you a Happy Week Ahead.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.