Warren Buffett Doesnt recommend his old strategy that made him rich #shorts -Link in comments
Channel: Understanding Stocks
Date: 2023-05-30

Warren Buffett made his first million investing in cigar butt businesses, which he learned about from Benjamin Graham. A cigar butt business is a company that is trading for a price below its intrinsic value. This means that the company is undervalued by the market. Buffett believed that these companies were good investments because they had the potential to generate high returns.

Buffett used a variety of methods to find cigar butt businesses. He would look for companies that were trading below their book value, or the value of their assets. He would also look for companies that were trading below their liquidation value, or the value of their assets if they were sold off.

Once Buffett found a cigar butt business, he would carefully analyze the company's financial statements. He would look for companies that had strong management teams, good track records, and sustainable competitive advantages.

If Buffett was satisfied with his analysis, he would invest in the company. He would typically hold the investment for a long period of time, often years or even decades.

Buffett's investment strategy was very successful. He was able to make his first million dollars by investing in cigar butt businesses. He has continued to be successful over the years, and he is now one of the richest people in the world.

Here are some of the key principles that Buffett learned from Graham that helped him make his first million:

Invest in undervalued companies. Buffett believed that the best way to find good investments was to look for companies that were trading for a price below their intrinsic value.
Invest in companies with strong management teams. Buffett believed that the management team was the most important factor in determining the success of a company.
Invest in companies with good track records. Buffett looked for companies that had a history of generating profits and growing their earnings.
Invest in companies with sustainable competitive advantages. Buffett believed that companies with sustainable competitive advantages were more likely to be successful over the long term.
By following these principles, Buffett was able to make his first million dollars and become one of the richest people in the world.

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