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Billionaire investor Warren Buffett invests mostly in the US. But many of his investment lessons are just as applicable here in the UK stock market.
Today I’m looking at some of his past recommendations and recent purchases. And I’m thinking about some sharing. London Stock Exchange It may receive Buffett’s seal of approval.
Ten years
“If you don’t plan on owning a stock for ten years, don’t even plan on owning it for ten minutes.He said.
That’s one of his most important tips, and it’s helped him a lot over the years. From the moment he spoke to the leader Berkshire Hathaway In the year In 1965, Buffett averaged 20% annual growth. What is an investment in Berkshire Hathaway worth today? In the same investment more than 100 times S&P 500.
So, investing in the UK, I’m sure Buffett doesn’t care about the current rate of inflation. Or interest rate forecasts for the next 12 months, or something like that.
No, he thinks where, for example, Lloyds Banking Group It will be in 10 years, not next year. And where the housing market may be headed Taylor Wimpey In another decade. Not what mortgage rates are likely to do in the next few months.
Insurance
“We keep money, we can invest it, but that is not ours.“
That’s what Warren Buffett said about the cash or float that insurance companies keep from premiums paid by their customers. With large insurance holdings, he amassed billions in floaters. And he invested to earn more profits for Berkshire Hathaway shareholders.
Any of us can get into this kind of investment, in a small way, by buying some insurance stocks. Now I think Aviva, Legal and generalAnd most of the sector looks attractive.
Business can be cyclical, and stock prices can be quite volatile in relatively short periods of time. But looking at a shorter 10-year horizon paints a different picture. Investors who worry about how the next two years might play out aren’t following Warren Buffett’s tactics.
Oil
“When you buy a large oil company, how it works depends a lot on the price of oilHe said.
That’s what he said about investing in oil and gas stocks, and it may sound obvious. But for me it contains a gem.
The reliable successes of investing in oil have not come from small exploration companies hoping to hit a big discovery. On average, they seem to be mostly losing money, only occasionally coming up good.
We are more likely to make long-term gains from stocks of oil production companies that can extract blacks at below-market prices.
By 2022, Warren Buffett has invested more than 20 billion dollars Chevron And Occidental Petroleum. Does it make similar investments? Shell And Bp Investing in UK shares? I do not know. But he clearly sees at least another 10 years of profits from the industry and maybe a little more!