Follow Warren Buffet’s advice on investing in the stock market

Investing in stocks without understanding what is going on is like betting in a casino.

Warren Buffet, called by many as the ‘Greatest investor alive today’ has always been open about the way he invests. Pouring over his speeches, I have developed this checklist to help you gain an insight into Warren Buffet’s

approach.

There are over twenty points to note. If you can only handle five questions then this is my take:

  1. Do you know how the company’s money is made?

  2. Is there a high threshold for new entrants meaning that the company is sparred from fierce price wars?

  3. Has the management demonstrated a high degree of integrity, intelligence, and energy?

  4. Is the company conservatively financed with a below industry average debt to equity ratio?

  5. Is the CEO home grown? Outstanding organisations grow their own CEOs.