4. Applying These Principles

A few of Buffet’s investment techniques might be a bit difficult to implement but absorbing the essence of each tip is important. He never gives any advice unless he follows it. So, when he preaches something, he actually practices it. As he has built his immense empire from scratch just by following these basic rules, so can you. All you need to do is follow these simple rules.

Sloate says, "Whether purchasing a bond, a stock, a piece of real estate, or a business, the average person can evaluate the cash flows and their sustainability.  Thus, he or she can compute an intrinsic value."

Sloate says that calculating free cash flow and unlevered return on capital is very helpful in businesses and real estate ventures. For public firms, he vouches on Google Finance, which gives accurate figures on unlevered returns on capital and free cash flow.