Investment rule number 1: Never lose money
Warren Buffet lost some money in the financial crisis. What he really means is being a sensible investor, cautious and avoid gambling on the stock market.
Investment rule number 2: Never forget Rule 1
Warren Buffet does not look at a company’s potential upside or future cash flow, but he rather looks for reasons a company might fail catastrophically.
Have a buy-and-hold mentality
“Our favorite holding period is forever.” – Warren Buffett
Warren Buffet focuses on purchasing high-quality stocks of high potential companies. He embraces the buy-and-hold mentality completely and minimizes the investment decisions he has to make. Buying at the correct timing and selling when the stocks are at peaks.
Know your investments
Buffet avoided investing in the technology sector, and that helped him avoid the dot-com burst from 2000 to 2002. Throughout the working career, gaining some insights about certain industries are certainly helpful and advantageous. This is not to say avoiding other sectors completely but proceeding with a lot of caution.
Learn from your mistakes