Warren Buffett is a renowned American billionaire and one of the most successful investors in the world. He is often reffered to as ‘the Oracle of Omaha‘. He was the favourite student of Benjamin Graham, the father of value investing. In plain terms, Graham’s method involves spotting good, undervalued companies, buying them, and holding them forever.
What do I mean by ‘good‘ companies? Well, most importantly, they have to be profitable. This doesn’t just mean having high net profit margins. It also means a company should have a good track record of rising profits. Of course, this doesn’t guarantee the firm’s profitability will keep rising in the future. But at least it makes investing in such a company somewhat safer. Of course, dividend-paying companies have a big advantage over their peers that don’t pay dividends.
Then, a great business should also have a sound financial … Read more