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 is a voting machine in the short run, but a weighting machine in the long run. That means that the market will value the stock correctly if the short-term panic is over and the earnings are recognized. Stocks that consistently produce more cash for shareholders will rise over time. Figure of JPMorgan Chase 2006-2019 with a clear association between earnings per share (EPS) and price
Source: www.macrotrends.net
The best test to see if you are investing
Warren Buffett explains that the best test of seeing whether you’re investing is if you care if the stock market is open. If you bought a great business with increasing earnings, then you can ignore the daily quotations for years. Because you know that the value of the business will increase due to its superior performance and management. This is in strong contrast to the attitude of most investors, who just focus on the next year or two. This is also why it is so important to buy a business that you fully understand and want to hold indefinitely. Warren Buffett once said that if you buy Berkshire Hathaway, then you should want to own it for at least 5 years.