5 Secrets of Warren Buffett's Success
2. Having No Unrealistic Expectation
Unlike many investors, who being overconfident, start expecting much more than normal out of a stock which is unrealistic, but Buffett never did so. You will probably smile to what he says about it - "Earning more than 12 percent out of a stock is pure dumb luck."
"During the 20th Century, the Dow advanced from 66 to 11,497. This gain, though it appears huge, shrinks to 5.3 per cent when compounded annually .... For investors to merely match that 5.3 per cent market-value gain, the Dow - recently below 13,000 - would need to close at about 2,000,000 on December 31, 2099! If your adviser talks to you about double-digit returns from equities, explain this math to him," he says.
3. Read Everything
At a very early age, Buffett recognized the fact that 'knowledge is everything'. He had read every book on finance in the Omaha library by the age of 10. He has maintained this habit till date. He reads every possible movement in the market and also scrutinizes them. Jeff Matthews, Author of 'Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett' says, "Reading is probably the most favorite hobby of Buffett."
