Day 3: How does Warren Buffett Manage his Positions? |BRK Annual Meeting Preheat
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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
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Yesterday, we learned the standards or some perspectives on how warren buffett invests one company.
We also know that the stock market is constantly changing, and it's hard to win all the time.
Buffett also had stepped on "thunder" many times, but miraculously, those mistakes have not affected his wealth surge in the long run. Any miserable secrets? Do you want to know how exactly did he do?
Please check today's video, you will like it~
Today's Question: Have you learned Buffett's position management?
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Warren Buffett is a master of positions management. It is in fact a very important lesson to learn and practise.
1) Warren Buffett's basic stance is to hold a stock forever and allow the magic of compounding to happen
2) However if the stock is overvalued, or its fundamentals have deteriorated or if there is a better opportunity elsewhere, then it is time to sell. Examples given were Well Fargo and Walmart
3) Diversification - Do not put all your eggs in 1 basket. If one stock does badly there are other stocks to mitigate the loss
4) Choosing the right strategy to buy. It is not a matter of being Conservative or Radical. In Bull markets, Warren Buffett is risk averse but in Bear Markets he is a greedy activist investor
5) Cash is king which can be used to buy big when the markets are down
6)Buy in tranches to maximise returns and minimise risk
I am grateful for these key pointers and will use them when I invest.
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Buffett manages his position by choosing the right strategy according to market changes. Some of the strategies are as follow:
1) Long term holding concept
2) Selling or reducing holdings when stocks has been overvalued, when fundamentals have deteriorated or better opportunities appear.
3) To lower his position whenever the big bull market comes and the raise higher his position whenever the big bear market comes.
4) Cash is King. When the opportunity comes, can take alot of cash to bet.
5) Don't put all the eggs in the same basket which means to have a diversified portfolio in order toreduce risks
6) To build position in tranches to maximize the returns.
1. Sell when stock is overvalued or there are adverse changes to the fundamentals
2. Be greedy when others are fearful - bear market for strong companies is an opp!
WB will sell stocks that are over valued or fundamentally deteriorating (Risk Prevention and Control Method)
1) Have a diversified portfolio with companies in different sectors..
2) Position sizing
3) Knowing when to sell
4) Cash is king.. Be fearful and hold cash when others are greedy..
1. change in position when:
a.when stocks are overvalued
b.when fundamentals deteriorate
c.Better opportunity elsewhere
2.Ability to hold great company LT
3. Greedy when others fearful visv
#1 - I have learnt when to sell or reduce holdings.
: when stock has been overvalued
: when fundamentals have deterioted
: better opportunities appear.
#2 - The higher the market rose
1. Sell at overvalued - I know this but why is it so hard to let go [Facepalm]
2. Fundamental change - I'll try to take actions fast for this. Learned it the hard way, stupid diamond hands ✋.