Warren Buffett: How He Does It - Deepstash
Buffet's Way

Buffett follows the Benjamin Graham school of value investing, which are :

  1. Look for securities whose prices are unjustifiably low based on their intrinsic worth.
  2. Loo...

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Warren Buffett: How He Does It

investopedia.com

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Buffet's Investing Philosophy
  1. Buffett takes this value investing approach to another level.
  2. Many value investors do not support the effi...

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Buffett‘s Methodology
  1. Warren Buffett finds low-priced value by asking himself some questions when he evaluates the relationship between a stock's level of excellence and its price.
  2. Keep in mind these are...

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1. Company Performance
  1. Sometimes return on equity (ROE) is referred to as stockholder's

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3. Profit Margins
  1. A company's profitability depends not only on having a good profit margin, but also on consistently increasing i...

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2. Company Debt
  1. The debt-to-equity ratio (D/E) is another key characteristic Buffett considers carefully.
  2. Buffett prefers to see...

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4. Is the Company Public?
  1. Buffett typically considers only companies that have been around for at least 10 years.
  2. As a result, most of the technology companies that have had their

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5. Commodity Reliance
  1. You might initially think of this question as a radical approach to narrowing down a company. Buffett, however, sees this question as an important one.
  2. He tends to shy away (but not a...

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6. Is it Cheap?
  1. This is the kicker. Finding companies that meet the other five criteria is one thing, but determining whether they are undervalued is the most difficult part of value investing. And it's Buffe...

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6. Is it Cheap? (cont.)
  1. Once Buffett determines the intrinsic value of the company as a whole, he compares it to its current market capitalizati...

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The Bottom Line
  1. As you've probably noticed, Buffett's investing style is like the shopping style of a bargain hunter.
  2. It reflect...

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