five principles of investing

And how principles facilitate decision making in work and life.

My main advice was from Buffett: Buy great companies at good prices. But what do “great companies” and “good value” mean? I realized that I was not ready to spend too much time studying the market and reports, so I formed for myself five principles of investing that help me make decisions.

Which companies do I invest in:

Companies whose product I understand and are ready to use. Based on this principle, I boldly invested in one of the beer companies during the fall and got + 150%, because from my own experience I knew that the product was good.

Companies whose shares have fallen in value or significantly below their competitors. This principle eliminates the need for an in-depth study of reporting. I look at past results, study competitors and compare key numbers. On the basis of which I can understand when the price is understated.

Companies whose product is difficult to copy and promote. Such companies are more resistant to competitors. For example, try creating a new Google. This is almost impossible since it not only has dozens of services, but also a huge user base.

Companies that will grow in the current environment. A good example is ZOOM, which grew a lot during the pandemic. And the opposite example is any offline business that has suffered over the past year.

Companies with a strong brand. The brand is often more important than the characteristics of the product, because most people shop with emotion or simply save energy by choosing a familiar company.

I am well aware that I am a novice investor and the results of recent months are largely associated with a good moment. I only share my principles that help me make decisions.