Wednesday, December 28, 2005

Warren Buffett's Advice for new investors

- Don't worry too much about your mistakes

- Don't learn too much from your mistakes
o Don't become Mark Twain's frog that never sat again on a stove after being burned
o BUT...never be willing to play a "fatal" game

- Don't confuse social progress with the chance to make money - look at airlines and autos for examples

- Law degree is not essential, but good if you think it will help in your specific career

- Learning to think like a lawyer is a valuable trait

- Allocate even more of your day to reading than he does

- Read lots of K's and Q's - there are no good substitutes for these

- Read every page

- Ask business managers the following question: "If you could buy the stock of one of your competitors, which one would you buy? If you could short, which one would you short?"

- Always read source (primary) data rather than secondary data

- If you are interested in one company, get reports for competitors. "You must act like you are actually going into that business, and if you were, you'd want to know what your competitors were doing."

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