Here is what investors can learn from Berkshire Hathaway Chief Warren Buffet's annual letter to Berkshire shareholders.
Berkshire Hathaway chief Warren Buffett released his annual letter to Berkshire shareholders
Here are the top tips for investors from the oracle of Omaha's letter...
Buffett said that investors must keep companies which are credible in hand "Truly good businesses are exceptionally hard to find. Selling any you are lucky enough to own makes no sense at all."
Berkshire advised that when the annual report of a company is released "Focus on operating earnings, paying little attention to gains or losses of any variety."
Buffett emphasises that investors should be rational before taking a decision "Rational people don't risk what they have and need, for what they don't have and don't need."
Buffett reminds us that in value investing, share price do not always reflect underlying business fundamentals"Over time, investment performance converges with business performance."
Do not be concerned about volatile stock prices is what Buffett had to say "Charlie and I have no idea as to how stocks will behave next week or next year. Predictions of that sort have never been a part of our activities"
Buffett advised that one must never be short of cash during difficult financial situations "I will never risk getting caught short of cash."
On share repurchases, Buffett said that one must not buy overpriced shares"Blindly buying an overpriced stock is value-destructive, a fact lost on many promotional or ever-optimistic CEOs."