Title: The Investing Principles of Warren Buffett - How to Invest
Headings: The Investing Principles of Warren Buffett
The Investing Principles of Warren Buffett
1. Mr. Market – How You Should Imagine the Stock Market
What is the stock market?
How to use the stock market to your advantage
The Mr. Market principle is still very helpful to Warren Buffett
Market fear and overselling
Recessions are a normal part of the economic business cycle
Stay objective and use recessions to your advantage
2. Stocks are Businesses
The best test to see if you are investing
3. Margin of Safety – Always Leave Room for Error
Applying the margin of safety
The good thing about lower prices
4. Your Own Behavior
The old investing principles are still relevant
What you can do with these principles
Where can you find these principles?
In sum, the investing principles of Warren Buffett are:

Content: The stock market can be intimidating, and the price fluctuations might scare off (potential) investors. Graham basically tells that an investor should see the stock market as an unstable person (called Mr. Market) who can be very happy or very pessimistic from time to time. The smart thing to do for the intelligent investor is to ignore Mr. Market’s behavior most of the time and to take advantage of Mr. Market when low prices are offered. What is the stock market? The stock market can be thought of as a large trading market that allows millions of people to buy and sell financial instruments like stocks. The process is highly automated these days. Back in the 17 th century, people used to gather at the local marketplace in Amsterdam to trade stocks. Now, you can buy and sell without knowing with whom your trading. The danger in this is that you can be tempted to sell or buy so easy, that you give little thought to making a well analyzed decision. It does however require strong mental discipline to buy during recessions.