Warren Buffett invests like a Girl. What about you?

10^th June 2020

Warren Buffett invests like a Girl. What about you?

Dear Fellow Travellers,

Namaste from Hitesh! Our Self Knowledge Learning 1^st batch is over. We are starting our new batch this Saturday. Those who have shown interest were replied individually on their WhatsApp. Normal guys invest lakhs for outer educations, for their professional skills or educations skills. Many times – people found at a later stage that the business or job they are doing is not actually they wanted to do. They wanted something else. Better late than never.

Take just 6 hours of your time and invest in Self-Knowledge. Unless you know yourself very well – you will have issues in your job/business and professions going forward. So, let me know.

I keep on reading and I have come across beautiful research done by Louann Lofton in his book – Buffett Invest Like a Girl. According to him to succeed in a market – you need more of FEMININE Quality than Male Quality. He found out from his research that Buffett has more Feminine Quality when he deals with the investments. Let us have a look at the main qualities of Female investors according to him. He has talked about 8 Qualities. I will deal with 1 Quality each day. So, you can enjoy it.  

1. Trade less than men do.

Trade Less, Make More. Buffett is famous for saying that his “favorite holding period is forever,” Holding on to the companies you invest in is important to Buffett because he likes to emphasize that when you buy a stock, you aren’t just buying a three-or-four-letter ticker, dancing across the screen like some mythical secret code. No, you’re buying a piece of a living, breathing company.

There’s no difference in Buffett’s eyes, nor should there be in yours, between investing in a publicly-traded company and buying outright, for example, the sandwich shop down the street. They each represent ownership of a business; the difference just comes down to how much you own—the whole thing or a part. (Although perhaps as the owner of the sandwich shop, you’d get a discount on that delicious turkey sub you like so much— shareholders aren’t guaranteed such special treatment. On the other hand, that sandwich shop probably won’t pay you a dividend, which a lot of public companies will. Everything’s a trade-off, isn’t it?)

Buffett likes to talk about waiting for the “fat pitch” to come and the freedom that gives investors to avoid mistakes. In an interview with the New York Times in 2007, he explained his thinking this way:

“What’s nice about investing is you don’t have to swing at pitches. You can watch pitches come in one inch above or one inch below your navel, and you don’t have to swing. No umpire is going to call you out. You can wait for the pitch you want.”

Luckily for us, unlike baseball players under pressure from coaches and their fans to swing, we have the luxury of waiting without anyone getting impatient but ourselves—and that impatience is something we can learn to tackle. It can be tempting to jump in when you see stocks rise (and that’s made all the worse by listening to financial media hoopla and nonsense), but don’t. Exercise restraint. Your portfolio will be the richer for it.

Buffett himself was patient during the last several years, letting around $44 billion in cash (yes, that’s with a b) sit on Berkshire’s balance sheet during 2004, 2005, 2006, and 2007.

He finally found it when the market dropped in the fall of 2008 amid the financial crisis. He jumped in, spending $20 billion snatching up pieces of General Electric and Goldman Sachs, and encouraging others to stare down panic and fear and take advantage of the great opportunities the market was presenting them at that time. As he’s often quoted as saying, in one of his most famous and enduring (and endearing) turns of phrase, “Be greedy when others are fearful, and fearful when others are greedy.” Patience is also important once you’ve made the leap.

Currently, he is sitting on USD 140 Billion, 3.5 times more than the 2007 balance. He is waiting for the fat pitch.

Being a successful investor isn’t easy. It requires fortitude, strength, preparation, and a willingness to avoid acting just for the sake of “doing something.”

To get there, keep the following in mind: -

• Remember you’re buying a piece of an actual business.

• Take the long view.

•Be patient.

Practical Issues with Small Investors in following above advice

If you have any questions/problems in doing above – you can write and I will try to deal with that in my next post. The purpose of this feedback is to encourage learning from the MASTER.

Tomorrow we will deal with point number 2.

Happy Investing.

Follow me on Twitter @hiteshmparikh / WhatsApp – +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh