Let's share Buffett's investment decision system. Buffett's investment system can be summarized as "2+5+8+ 12", namely:
Two investment methods
Five investment logics
Eight stock selection criteria
12 investment point
Two investment methods
1. Hold for life, and check the following figures once a year:
A. initial return on equity;
B. operating gross profit;
C. debt level;
D. capital expenditure;
E. cash flow.
2. When the market overestimates the price of holding stocks, you can also consider short-term cashing.
Five investment logics
1. Think of yourself as the operator of the enterprise, so Buffett becomes an excellent investor; Because Buffett regards himself as an investor, Buffett becomes an excellent business operator. Management experience is the root of Buffett's uniqueness.
2. A good enterprise is more important than a good price.
3. Pursue a consumer monopoly enterprise all your life.
4. What ultimately determines the company's share price is the company's substantial value.
There is no time to sell the stock of the best company.
Eight investment criteria
1. It must be a consumer and a monopoly enterprise.
2. The product is simple, easy to understand and promising. Even a fool can manage it well
3. Have a stable business history. Like IBM, McDonald's and so on
4. Operators are rational and loyal, and always put the interests of shareholders first.
5. The key to financial stability.
6. High operating efficiency and good returns.
7. Low capital expenditure and abundant free cash flow.
8. The price is reasonable.
12 investment point
1. Make use of the stupidity of the market to make regular investments.
2. The buying price determines the rate of return, even for long-term investment.
3. The compound interest growth of profits and the reduction of transaction costs and taxes have benefited investors a lot.
Don't worry about how much a company can earn next year, just look at how much it can earn in the next five to 10 years.
5. Only invest in enterprises with high certainty of future income.
6. Inflation is the biggest enemy of investors.
7. Value-oriented and growth-oriented investment concepts are interlinked; Value is the discounted value of the future cash flow of an investment; And growth is just a forecasting process to determine value.
8. The investor's financial success is directly proportional to his knowledge of the investment enterprise.
9. The "margin of safety" helps your investment in two ways: first, it buffers possible price risks; Secondly, you can get a relatively high equity report.
10. It is foolish to own a stock and expect it to rise next week.
1 1. Even if the chairman of the Federal Reserve secretly tells me the monetary policy for the next two years, I will not change any of my actions.
12. Ignore the ups and downs of the stock market, don't worry about the changes in the economic situation, don't believe any predictions, don't accept any inside information, and only pay attention to two points: a. What stocks to buy; Buying price.
This 2+5+8+ 12 constitutes the most unique and fascinating part of Buffett's investment secret. These actions distinguish Buffett from ordinary investors. Buffett put forward two investment principles:
Rule 1: Never lose money.
Rule number two: never forget rule number one.
A Buffett fan put forward two new principles:
Rule 1: Never sell your Berkshire shares.
Rule number two: never forget rule number one.
In April 2003, Buffett extended his "golden finger" again and bought more than 200 million shares of China Petroleum (0857 HK) at an average price of HK$ 1.66, accounting for 1.3% of the total share capital of China Petroleum. From June 5438 to February 2003, PetroChina's share price was close to HK$ 5. Buffett devoted himself to his work and continued to gallop on the battlefield.