Investment is one of the less stressful way to grow your money unlike starting a business, not everyone has the zeal or the time to grow a business from scratch, the other way to go about increasing the value of your money is by investing. The truth however is that there are millions of money lost on investment every day but because people die through road accident everyday does not mean we should run away from road transportation and the same principle applies to investment.
Warren buffet who for very obvious reasons has been labelled a king in investment and he has two rules to investment and they are: Never lose money and the second one is never forget the first rule.
Never lose money to me sounds almost impossible because I have friends who are pretty good with this game and have lost money for real, but I have been made to understand that it is possible to invest without losing money.
Any good investor knows how much the value of a company is before he makes any investment but a lot of new investors make the mistake of taking the price on the stock market for the value of the company. The stock price of a company can easily rise or fall, even a slight negative news can reduce the price of the company but the value of a company does not fluctuate easily and that is the true worth of the company.
Warren Buffet’s rule of investment cannot eliminate the risk linked to investment but we can reduce the possible risk by carefully understanding the value of the company. A good investor only invests in companies that have sustainable values and are worth the investment.
Warren buffet sticks to his rule of not losing money while investing because he only invests in companies that are straight forward and easy to understand, and instead of looking at the current value of the company, he is more interested in the long term value of the company and the reason why customers will keep coming back for that product, if there is no reason available for customers to keep coming back, then the company does not have a long time value and warren knows it is not a promising place to invest.
A good brand is one legacy that people fight for, once a company is able to pitch its brand to the public and it is acceptable, the company just needs to sustain the brand and everything remains under control. While you are trying to invest, look out for good brand values.
