Saturday, April 18, 2015

Buy what you understand

I ll be writing about First Reit tonight and possible will compare with another Reit if time permits.

These past few weeks have been hectic with presentations and studies and exams are just a week away.

Anyway here's a quote by The Oracle of Ohama

You don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of the circle is not very important; knowing its boundaries, however, is vital.~ Warren Buffett (1996)

It just means you need not understand many companies to be good in investing. All you need is to understand the sector/s which you are keen in investing, be it just one business, and be good in it. Berkshire holds lesser stocks than most of the asset management companies, yet it outperforms all of them and beats the market in the long term.

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