Bangalore: Who would not want to take a leaf from the book of the world's perhaps greatest investor? Buffet’s principles and philosophies of investment are something investors look forward to. What better place to look for them than the letters written by him?  Charles Lewis Sizemore, of Sizemore Investment, sheds light on the latest shareholder letter given by Buffet. Love Buffet’s investment principles or hate them but one cannot ignore them. So, read on about the 3 investment beliefs of the ‘Wizard of Omaha’ –

1. “Currency Denominated” Investments

These investments include money market bonds, like – mutual funds, stocks, bonds and other fixed income instruments. Buffet is wary of such instruments and considers them unsafe investments. Though most advisors would suggest first-time investors to go for mutual funds, Buffet thinks otherwise. Buffet quotes, “they are among the most dangerous of asset. High interest rates, of course, can compensate purchasers for the inflation risk they face with currency-based investments and indeed, rates in the early 1980s did that job nicely. Current rates, however, do not come close to offsetting the purchasing-power risk that investors assume. Right now bonds should come with a warning label.” Buffet’s philosophy can be applied to Indian markets as well. This is so because all markets essentially behave in the same way.

Contrary to his belief, Buffet sets aside a good deal of cash and T-bills (Treasury Bills – issued by the government) on him. As he owns a number of insurance firms, having these seems mandatory. He prefers having these for another reason. Having ready cash in hand becomes very handy in the purchase of real-estate property.