Video: Warren Buffett - Value Investing 101

Here is a video of Warren Buffett, perhaps the greatest stock investor who ever lived, giving the most basic advice about stock investing. (It is about 5 minutes long.)



Most of the interview discussion surrounds his purchase and subsequent selling of Petro China.

However, here are the takeaways from what he does:

1. Look at the Business First (Is it solid? Does it have good growth? etc.)
2. Look at the Stock Price (or Business Price)
3. Value the Company
4. If (a) the Business is good, and (b) the Price is A LOT LESS than the Value, then buy the stock in that company.

Each of these--excepting #2--could easily be a lengthy topic within itself.

Plus, Warren is extremely careful not to fully explain HIS checklist for each of these, but his thinking is sound.

Even though this list seems obvious, it amazes me how few people try to emulate it. I hear people mention that they do, but then I hear a lot about chart reading.

Essentially, don't buy something simply because it is hot. Buy something, because it's a good value. It's possible that something that's a good value might just be hot, too.