The Best Investment Tips From Warren Buffet

Highest Cost Doesn't Mean Higher Value

Mr. Buffet knows value when he sees it because he was highly influenced by the godfather of value investing, Benjamin Graham. Real value, he believes, consists in buying high-quality companies when they are at depressed prices relative to their intrinsic worth. He firmly believes highest cost doesn't mean higher value. Instead, Mr. Buffet searches for firms he believes are valuable, but not necessarily recognized as such at the time. This is opposite of the 'herd mentality' approach in which some investors think increasingly higher prices mean a stock is increasingly valuable. Often, the best opportunities to buy occur when most other investors are running scared because of a major market meltdown and there is 'blood in the streets.'