3. “Do Not Buy Stocks What Everyone Else is Buying”

Though it might seem a bit odd, Buffett advices investors to keep away from the so called ‘hot stocks.’ He advises investors not to go for the popular stocks but for those which are relatively not popular. The logic behind this is that when a particular hot stock is bought by many investors, its stock price goes up and it becomes over-valued, as is the case with most Apple stocks. He even advises us to buy those stocks which are deemed bad buys by most companies. However, it is important to check the background of the stock and make sure that it exhibits potential.