Reason Behind Warren Buffet’s Success
No need to introduce warren buffet, He is the legend in Investment. Today we will discuss why he was so successful in investment and how we can adopt his strategy in our investment life.
How can Buffet make more money than everyone else in the same market?
When everyone is adopting a specific strategy in the market, which will no longer be effective. Therefore, generating more profit in the market requires you to be different. You must either have access to information which is not known to others, or you must adopt a different type of investing strategy that requires you to look at the market with different prospective. Warren Buffet has adopted second one in their investment His investing strategy and outlook on the market as a whole is radically different than that of the rest of the market. Because he thinks so much differently than the market, he has an edge well before he makes any investments. What’s this radical, magic strategy that has enabled Warren Buffet to become one the richest men in the world?
Buffet was following the strategy which he learn from his Guru Benjamin Graham that is Value Investing, The word itself explaining that Investment in Value. In value Investing find out the stocks which are under-priced than its Value in the market and invest in that stock. So, why everybody is not adopting this strategy? Because It looks simple but deriving the value of any stock is very difficult task. Because almost all others are busy in buying and selling to make short term profits and for that they are using statics of short term. Rather I would say that the system has been established in the market is short-sighted. New investors as well as an investor having less knowledge will be converted in to short term mid-set and this becomes very tough to break this thinking because it is a groupthink just like what we are experiencing about SIPs.
Then how Buffet was not affected with this mind-set?
Buffet knew very well the power of groupthink, which is the part of any market. For keeping a side from this mind-set of the market he was being isolated from most other investors allows him to maintain his unpopular but extraordinarily successful views of the stock market. He can’t be swayed to invest by people he doesn’t know. As a result, he has been able to continue to deliver at a high level for over a half century.
Buffett is successful because he is different.
You can also be successful by adopting Warren Buffet’s strategy in Mutual Funds using our most successful mechanism called BLTP – The NeXT Gen Investment Strategy and keep yourself different. Somebody has called that BLTP is working just like Brahmos Missile Get it, Set it [Tag it to your goal] Fire it and Follow it. BLTP is having capacity to track your goal and taking appropriate decision considering current market risk to protect your hard earned money.
Sooner or Later Price has to be corrected against its Value
At Business Link we believe that always follow the Value, not Price, because price might be over-priced or it might be under-priced. Whatever it might be, Price or Market, it has to be corrected against its value. So if we buy more when price is under-priced, and less or no buying at over-priced compared to its value, then we will be at lower risk of losses due to market fall. There is one popular proverb “Penny saved is a penny earned” we at Business Link we have twisted this like this “Money you saved from losses, will earn money for you in future”
Someone ask me “how you are managing to generate higher returns than SIP / STP always?” I ask him straight are you playing Rummy. When you are playing blind, are you winning all the time? Why not, because you do not know that what cards are you holding and what the risk you are taking by playing with those cards. Same way in SIP STP you are continuing investing regardless whatever is the market risk. One more question for clearing the view what will you do when you are driving on any road first time, your both the head lamps are fused and it is no moon dark night how will you drive on that road? You are not aware about whether road is smooth or not how much turns are there. You will drive cautiously and taking care about you are not going to face any accident. Thus you are protecting yourself against any mishap the same way we are taking care about all the risk involved in the market. Someone smart IFA counter argue on my 2nd question “We can use google map to reach our destination” and I said “That is what I want to say, You need something which guide you when you are stuckedup on blindspots and BLTP is the Guide for you”. For taking care we are using 6 major parameters of the market which are widely used for calculating market risk
- Nifty-Div. Yield
- NAV of the Scheme
- Inception of your investment
First five are widely used by various value investors to measure the risk of the market we are moving one step forward and included your inception point for calculation of the risk factor for you only because at Business Link we think that at any given point of time the Risk involved in the market is relative and hence it might be different for each individual entered in the market at different level, for example if today Sensex is 28000 and two persons entered in the market at the Sensex level, one at 20000 Sensex and another at 35000 Sensex. What would be the strategy for both investors at 28000 Sensex? Where one investor is at lower risk then his entry level and another is still need risk to be diluted. How will you treat both the investor? In BLTP we are taking care of both the investors and calculating the risk involved in their portfolio and taking decision accordingly, which dilute the risk and make the portfolio strong enough to protect against disruption(Market Fall).
The success in the Investment is not dependent on Investing; it is how you are investing and how you are behaving. – Shailesh Sampat
Returns will not be determined by easiness or toughness of investment process, it is by Investment Strategy you adopted. – Shailesh Sampat
In Invest what you think Easy will make you Busy tomorrow. – Shailesh Sampat
Success doesn’t measures by AUM but it is measured in Investor’s real satisfactions, How Investor’s portfolio is protected against Market Disruptions. – Shailesh Sampat
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