Warren Buffet’s Investment Strategy: The Warren Buffett Way (Essay Sample)

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Warren Buffet’s investment strategy is unique in nature. It does not conform to the Markowitz’s investment theory, used in modern financial markets. From the video, Buffet believes that diversification is for conservative investors, who don’t plan properly and are in shares trade for speculation purposes. From Buffet’s perfective, the share market is very volatile, and a good investor needs to concentrate on one company stocks, to earn huge amount of dividends. He also considers diversification wrong because it psychologically tortures an investor, making them behave like gamblers.
The key investment strategies embraced by Buffet include value investing, where he concentrates his investments only on companies selling their stock at a price lower than their intrinsic value. He also advises that an investor should not trade in debt capital, and must ensure that they are not swayed by public investment information; this can be achieved through the use of self-research and independent thinking.
Buffet depends on his top employees at Berkshire Hathaway, who manage all his conglomerates worldwide. He interacts with the subsidiary heads, and investors through Annual general meetings (AGMs), and also frequently writes the board letters highlighting any investment concerns. Investment in insurance company has been of great benefit to Buffet because the premium paid upfront by the insured, act as the float that he uses in other mega investments, unlike other Wall Street investors who depend on debt capital for their securities investment.
Buffet believes that it is important for an investor to have an independent thinking. This is because the information shared in the public domain is already immaterial and always affected by global corporate governance menace. Ind...