" Warren Buffett and his investment strategy

Warren Buffett, a firm believer in a profit worth investing model, has long maintained the view that people should only purchase stocks in businesses with stable foundations, good earnings capacity, and the prospects for sustained success. Warren Buffett allows companies to tell him of their financial performance, not of short-term volatility in the stock market. It is a very patient investing approach focused on the valuation of the firm. The whole strategy of Buffett is to look at the purchase of shares from the perspective of a company owner rather than a stock exchange from the point of view of the company owner rather than an amateur stock exchange. He presented the investment strategy that comprised of valuable philosophies of management, business, finance, and investment practices (Hagastom, 1995). Comment by Zhi Li: 上来就这种长句作为演讲是不合适的，演讲开头应该短而精确 Comment by Zhi Li: Intro看到是第一篇的讨论的第一段，可以缩短， Comment by Zhi Li: 根据新大段重新改一波？ Comment by Zhi Li: 感觉看不出来，是intro啊,没看出来对后面每一段的key word

Warren Buffet advised that investors should look at the economic reality rather than accounting reality because it is a conservative method that does not provide the full picture. Accounting rules that are associated with financial statements do not contain intangible properties such as trademarks, licenses, client partnerships, supply chain relationships, management experience, and skills, etc., whereas these intangible assets are very important assets under economic reality (Rajablu, 2011). Another Approach by Warren Buffet states that investors should buy a company that has a fair chance to make improvements regardless of whether the global economy is raising or contracting. The strategy is to avoid monitoring the day to day fluctuation of the market and select stocks that fit their business. Warren focuses on the management and progress of the company instead of the market values (Hagastom, 1995). Comment by Zhi Li: economic reality does not follow the coures

Rather than the short-term or near-future share price or market movements, he reflects on the quality of the business. Instead of the share price, he adopts a long-term, large-scale market valuation-based investing strategy that relies on positive fundamentals and inherent business value. Buffett wants "a sustainable competitive advantage" for firms. What he means by this is that the company has a market position, market share, branding, or other long-lasting lead on its rivals that either eliminates competitors from easy access or manages a limited supply of raw materials. Comment by Zhi Li: 请问这段是讲什么，感觉地一段都没太说清楚啊@-@，短期股票投资？

Buffet uses the strategy of bargaining when he is betting for the winning price while applying the game theory, which helps in satisfying both partners. He insisted on a strategy and model of risk-free investing. In his ventures and mergers and acquisitions (M&A), he used absolutely no debt finance and favored cheap stocks, not cheap businesses. He used a risk-free rate of return with a long-term investing approach to minimize risk. He concluded that the strongest firms are those that can use vast quantities of money to achieve a very significant rate of return. The infamous Mr. Market Allegory proposed by Warren Buffet explains that sound decisions are extremely important in business and investors should never make impulsive or emotional decisions in investment. Moreover, investors must be psychologically and financially prepared of handling the daily market fluctuation. Those investors that is unable to handle a 50- percent decline without panic would likely succeed in business (Hagastom, 1995). Comment by Zhi Li: 博弈论这个可以

In conclusion, an investor should search for a business that knows corporate activities, has favorable long-term opportunities, is owned by trustworthy and knowledgeable executives, and is available at an affordable price. That means investors need to consider the conditions for-profits, expenditure, cash flow, corporate governance, pricing, stability, and resources. This suggests that investors can only purchase the stock of firms among their circle of financial and academic expertise. The principle of smart investment is that you can function as the owner of the company, by buying shares in a firm. That means you need to understand the organizational foundation of the business. Also, investors should understand the management and the operation of the company and the decisions they make. Comment by Zhi Li: 根据新大段重新改一波？ Comment by Zhi Li: 为啥要在结尾提新的内容？

References

Hagastom Jr, R. G. (1995). The Warren Buffett Way-Investment Strategies of the World’s Greatest Investor.

Rajablu, M. (2011). Value investing: review of Warren Buffett’s investment philosophy and practice. Research Journal of Finance and Accounting, 2(4), 1-6.