Day 4: Understand the Power of Compounding |BRK Annual Meeting Preheat
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Welcome to Day 4's video.
For kindly references: Day1-Day3 content, review learning still has a chance to get tiger coins.
Day 1: What's inside Warren Buffett‘s Portfolio? |BKR Anual Meeting Preheat
Day 2: How Does Warren Buffett Choose His Stocks? |BKR Annual Meeting Preheat
Day 3: How does Warren Buffett Manage his Positions? |BKR Annual Meeting Preheat
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You may have heard a lot of investors with short-term success, while very few to long-term champions, Warren Buffett is one of the names.
Buffett has been earning less than 30% for more than 30 years, so how does he create the myth of wealth growth?
Inside this video, we introduced two major strategies. Please click to watch:
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Warren Buffett's secret to grow wealth is the power of compounding. His famous quote "Life is like a snowball. All you need is a wet snow and a really long hill" reflects his philosophy on life. The key is to start early and let the magic of compounding happen.
The enemy of compounding is Loss. His famous quote is "Rule No. 1 - Never lose money and Rule No. 2 is Never forget Rule No. 1". This is because a 20% loss will need 25% gain to make up that loss. Similarly a 30% would need a 43% gain to catch up with the loss.
The other important thing I learnt today is to invest in companies that have been thoroughly researched, within my circle of competence and have a margin of safety.
Warren Buffett is also against leverage and making sure to have a cash pile that can be used in Bear Markets to buy quality stocks. Above all, to keep calm in such markets.
Wow! What a valuable lesson to learn from Warren Buffett. I can't wait for Video no. 5.
@Tiger_Academy Day 4
@TigerStars
1. Wealth accumulation by compounding
2. Reinvest your profits and let it grow
3. Never lose money
4. Thorough research
5. Never over leverage, keep cash for safety
#1 - Accumulating wealth is like rolling snowball . The power behind snowball effect is compounding.
#2 - The sharper the stock drops, the harder it will rise back up
Day4: The secret is EARN money, SAVE money, UNDERSTAND investing, INVEST, GAIN experience (don't discount experience), be PATIENT, INVEST more, be MORE patient and finally Eureka! You are a winner.
I like the concept of Rule number 2!!
Loss is worse enemy of compounding. We have to Control our Loses.