What Warren Buffett did after buying a loss making company?

The acquisition of Berkshire Hathaway was an emotional move taken by Warren Buffett and he learnt the lesson that you can't take emotional decisions in stock market. You are going to see what Warren did next after buying a loss making company and further philosophies of investment.

Topics we are going to touch

• Berkshire Hathaway as share holding company

• Philosophy of Philip Fisher

• Warren's own philosophy

• Rules to earn from investing

• Investing traits of Warren Buffett

• Future plans and good habits

Berkshire Hathaway as share holding company

Basically, Berkshire Hathaway was a textile industry but Warren found that there were no more profit in textile industry for this company. He turned this company from textile industry to share holding company. He started using it for investing. He bought shares of Washington Post, Coca-Cola, Geico and some other insurance bussines by using Berkshire Hathaway as a share holding company. This company now holds the stocks of more than 60 plus companies.

Philosophy of Philip Fisher

Warren Buffett had been following the philosophy of Prof. Benjamin Graham which says that 'buy stocks when they are undervalued'. Then he explored an another philosophy given by Philip Fisher which says that 'Invest in quality business'. The investor must invest in the company which provides value to the customers and has its own established value in market not only on the shares. At some circumstances company can be in recession but in long term that company will pour your pocket with money.

Warren's Philosophy for investing

Warren follows both Prof. Benjamin Graham and Philip Fisher. Graham who taught him to buy undervalued stocks and Fisher who said to only buy quality stocks. Buffet merged this philosophies and made his own philosophy which says that 'buy quality stocks at lower valuations.'

Rules to earn from investing.

There are several rules that Warren Buffett follows for successful investment. He believes to only invest in businesses which he can understand and analyze. Coca-Cola and Wringley's chewing gum were the two companies that he had been observing from his childhood so, this companies were those which he can understand and analyze. By following this method he got 9000% profit at Washington Post and still holding the shares of Coca-Cola and Wringley's chewing gum. He owns 20% stakes of Coca-Cola.

He follows this rules

Rule 1. Never lose money

Rule 2. Never forget rule no. 1

Investing traits of Warren Buffett

Warren Buffett believes in long term investments. He said that it takes lots of patients to hold a stock for long time. He was once asked how long could he hold the stock. He answered that he can hold it forever. So, this much of patients is required to earn profit in long term investing. He likes to buy stocks in recession period. He admit that he is still learning and has to learn more. He faced a loss in 2020 in Airlines sector due to virus pandemic. He has admitted that he sometimes made wrong decisions and has to learn from those experiences. This is the quality of an intelligent and good investor to admit his mistakes without hesitation and learning from those mistakes. 

Future plans and good habits

He has more enough to spend his rest of life without working but he still working because he invest not only to earn money but to fun, it gives him pleasure. It helps him to keep his mind in working state.

He said that to give his 99% wealth to charity. At early time, he aslo donated $49 billion. He is considered as most charitable person. Also, Invested in Elon Musk's project Solar city.

Became millionaire at the age of 32 and always in the list of top 10 richest persons list but despite of royal living he prefers simple living. He lives in his first house that he bought when he was young. He drives his own car. He prefers to live middle class. Gives 5 to 6 hours daily on reading. He believes that there is great contribution of Charles Munger, the associate of Warren Buffett in his investing journey. He considers Bill Gates as his best friend.

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