Warren Buffett’s Stock Advice That Changed My Life

generalmills

I want to share with you this short excerpt from Warren Buffett’s 1988 Letter to Shareholders of Berkshire Hathaway, because it is on the short list of investing quotes that have had a long-lasting effect upon shaping my general investing philosophy:

 “In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.  We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.”

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Dividend Investing: Make A Lot of Money Without A Lot Of Work

coke

When Walt Disney was asked to explain the biggest problem in his life, he answered: “Money. I always needed more money.” When we think big picture about the ways in which we can make money, there are generally two positions:

(1) We can sell our labor for an hourly wage. If you make $10 per hour and work 8 hours per day, you get $80 pre-tax. Simple enough.

(2) We can run a business. In that case, the money we make is the difference between profits and expenses, adjusted for taxes. Again, simple enough.

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