Warren Buffett's Stock Investing Strategy Is Actually Too Simple!! - Because Many People Don't Want To Get Rich Slowly??

Once, Jeff Bezos, the founder of Amazon, asked Warren Buffett about how he got his wealth, Jeff Bezos asked like this:

I asked Warren, "your style investing is so simple. Why doesn't everyone just copy you?" Warren Buffett answered, "because nobody wants to get rich slowly." [1]

If we study Warren Buffett's stock investment strategy, then actually Warren Buffett's stock investment style is very simple, just buy a good fundamental company at a fair price that regularly pays dividends, then when you get the dividends, just reinvest the dividends into stocks. Just keep doing this simple thing for years or even decades, then you will definitely be rich. There is nothing special actually about Warren Buffett's stock investment style.

What? Really? Yes, that's why Elon Musk in an interview, once said that Warren Buffett's way of getting his wealth was very boring:

“To be totally frank, I’m not his biggest fan, He does a lot of capital allocation. He reads a lot of annual reports of companies and all the accounting — and it's pretty boring, really." [2] [3]
"

Elon Musk

Warren Buffett's job is just reading financial reports from various companies, then investing in the companies, receiving dividends, and investing again, it's that simple actually. There is nothing special about Warren Buffett's stock investment style, but that's precisely why, because this method is considered boring, most stock investors don't like Warren Buffett's method, they prefer to trade in the penny stocks that stimulate their adrenaline, and end up getting slaughtered on the stock exchange.

GETTING RICH SLOWLY OF WARREN BUFFETT

Did you know that Warren Buffett started investing in stocks at the age of 11 in 1942, and it was not until 1986, when he was 56, that Warren Buffett officially became a billionaire? At the age of 21, Warren Buffett's wealth was $20,000. At the age of 26, his wealth grew to $140,000. At the age of 30, Warren Buffett's wealth had already reached $1,000,000 and it was not until he was 56 that Warren Buffett's wealth reached $1,000,000,000. [4] That means it takes about 45 years to become a billionaire in America and the process is very long and requires patience. That's why Warren Buffett once said, "The biggest thing about making money is time. You don't have to be particularly smart — you just have to be patient." [5]

So, patience is the main key to achieving wealth and achieving it through a slow process is the secret behind Warren Buffett's wealth. Most of the retailers on the stock exchange are mostly filled with people who do not understand this philosophy and tend to want to get rich instantly. Because they want to get rich instantly, they do not like stocks with good fundamentals, but they tend to take shortcuts by trading in penny stocks which are clearly rotten companies. It is True, once or twice they would get a jackpot and big profits, but they ignore the risk factor and continue to invest wildly and brutally so that one day they would be slaughtered and their wealth would disappear instantly just because they trade in penny stocks.

Warren Buffett never invests without risk mitigation. It is always the risk that Warren Buffett anticipates first, that's why Warren Buffett once said:

"Rule No.1: Never lose money. Rule No.2: Never forget Rule No.1.” [6]

Warren Buffett

It is clear that Warren Buffett always minimizes the risk first so as not to lose money before deciding to invest. Warren Buffett never prioritizes profit first, then risk. The funny thing is, most of the stock exchange retailers only think about profit first, then they would think about the risk later, that is the reason why many retailers are slaughtered on the stock exchange and lose a lot of money on the stock exchange.

CONCLUSION

If we are currently often slaughtered in the stock market, it would be good for us to introspect first ourselves that maybe, we are currently not applying investment principles like Warren Buffett does. One thing that must be remembered in investing in stocks is that minimizing risk is much more important than profit. Profit will definitely follow us if we have minimized the risk well. The bankruptcy of stock investors on the stock exchange is mostly retailers who are busy investing in penny stocks without considering the risks. This is something that Warren Buffett never does. So, if we want to be rich consistently and have stable wealth, follow Warren Buffett's way, which is to get rich slowly by investing your money in good fundamental companies that pay dividends, and reinvesting the dividends to buy another shares. It is so simple, or even it is too simple.

FOOTNOTES:

1. Ashok. "Warren Buffett's Investment Strategy". Learn Stock Market. Accessed on 25th October 2024.

2. Benzinga. "Elon Musk Dislikes Warren Buffett?". Benzinga. Diakses 25 Oktober 2024.

3. Moneywise. "‘I'm not his biggest fan': Elon Musk says Warren Buffett's way of getting rich is 'pretty boring' — but here's what you can learn from the Oracle of Omaha". Moneywise. Accessed on 25th October 2024.

4. Jeannine Mancini. "Warren Buffett Accumulated 99% Of His Net Worth After Turning 50 And Didn't Become A Billionaire Until 56: 'The Biggest Thing About Making Money Is Time. You Don't Have To Be Particularly Smart, You Just Have To Be Patient'". Yahoo Finance. 25 January 2024. Accessed on 25th October 2024.

5. Tanza. "'It's all mental with him': Warren Buffett's late wife revealed why it took the billionaire so many years to start giving away his fortune". Business Insider. 1 February 2017. Accessed on 25th October 2024.

6. Nomadic Samuel. "Warren Buffett’s Rule: “Never Lose Money” – Examining Its Viability". Picture Perfect Portfolio. 1 September 2024. Accessed on 25th October 2024.

SOURCES:

Willyam Wen. "Strategi Investasi Saham Warren Buffett Ternyata Simpel Banget!! - Karena Banyak Orang Tidak Mau Jadi Kaya Secara Lambat??". Willyam Wen. 25 October 2024. Translated By Willyam Wen. Accessed on 25th October 2024.

Ashok. "Warren Buffett's Investment Strategy". Learn Stock Market. Accessed on 25th October 2024.

Benzinga. "Elon Musk Dislikes Warren Buffett?". Benzinga. Diakses 25 Oktober 2024.

Moneywise. "‘I'm not his biggest fan': Elon Musk says Warren Buffett's way of getting rich is 'pretty boring' — but here's what you can learn from the Oracle of Omaha". Moneywise. Accessed on 25th October 2024.