The billionaire stressed that it is especially beneficial to own real estate in times of inflation because buying is a “one-time payment”.
Warren Buffett, CEO of Berkshire Hathaway, says there is Some companies are more likely to be successful than others in this environmentAccording to CNBC.
At Berkshire Hathaway’s 2015 Annual Shareholder Meeting, Kotb stated that it is better to own a company that does not require constant reinvestment because it becomes more expensive as the value of the dollar falls.
“The best deals during inflation are the businesses you buy once, and then you don’t have to keep investing in stocks anymore,” Buffett said.
He added that “any business with a large capital investment tends to be a bad business to be in a state of inflation and is generally a bad business.”
He also pointed out that companies are moving to Utilities or railroads “keep consuming more and more money” and are not profitable.
Instead, consider that “owning a brand is great during inflation.”
The Oracle of Omaha owns brands like See’s Candy, which they have owned since 1972.
Although most investors cannot buy a full-fledged business, it Buffett points out that they can get shares in companies they love.
Buffett said in 2009 that owning a piece of a “great job” is beneficial because no matter what happens to the dollar’s value, the company’s product will continue to be in demand.
The billionaire also highlighted that it is It is especially beneficial to own real estate in times of inflation Because buying is a “one-time payment” for the investor and has the added advantage of being able to resell.
“If you have something that is useful to someone else, it tends to be priced in terms of replacement value over time, so you really get the inflation build up,” he said.
However, the best course of action for most investors is Not choosing individual stocks that you think will do well, but investing in inexpensive index funds, which are much less risky, notes CNBC.
These funds, which hold all the stocks in one index, have long been recommended by the president of Berkshire Hathaway and automatically diversify them. The S&P 500, for example, includes big-name companies like Apple, Coca-Cola, and Google.
For people looking to increase their retirement savings, diversified index funds “make more sense in practice all the time,” Buffett told specialist media previously.
Warren Buffett loves to tell this mystery
Berkshire Hathaway’s CEO fortune is estimated at $96 billion, according to Forbes magazine. The so-called “Oracle of Omaha” is the sixth richest person on the planet thanks to his specialty: winning and buying stocks.
but. Not all Buffett’s advice and wisdom can be found directly. Sometimes you have to dig deeper into your interviews and musings to find hidden pearls of knowledge.
Specialized portal CNBC Make It specifically found one of these pearls in a pile of anecdotes that the big investor explained in a lengthy financial report. Therefore, listen to this advice in the form of a puzzle as it hides a powerful key to success in the world of investing and life in general.
In the document in question, Buffett suddenly explains that one of his favorite puzzles comes from Abraham Lincoln. He says it stuck with him since he first read it.
“Abraham Lincoln once thought the question: If I say that a dog’s tail is a paw, how many paws does this dog have?”
Before continuing, think about this. Read the puzzle a few times because it may be a little unusual compared to the puzzles you are used to. If a dog’s tail is said to be a leg, how many legs are in all?
If you think you know the answer or are giving up, keep reading Warren Buffett’s thoughts on this issue:
“He gave the same answer,” explains the investment master. “4. A dog has four legs. Just because you say a dog’s tail is a leg doesn’t necessarily mean it’s a leg.”
Why should you consider the answer to the riddle, and the entire dilemma itself, when you want to invest and even make important decisions that go beyond the economy? Because what it explains to you is something very simple, but tends to be forgotten: truth is fact, and illusion is an illusion. Neither the truth is an illusion nor the illusion is the truth.
In life it is important to be skeptical. Don’t believe what any supposed person or expert in finance, health, psychology, and housing tells you… no matter how convincing their definition of something is: their persuasion won’t change reality… but it can change your attitude and deceive you or hurt you.
After solving the puzzle, Buffett considers the current trend of bankers and CEOs to label anything “income” in order to hide costs, financial loopholes or information that could harm the companies they represent. This is a working example of someone calling something that is actually a “tail” a “leg” while trying to make sure that no one is aware of the change.
So how do you act unlike a skeptic? Well, as a researcher. Don’t trust one source: Combine several sources. Don’t trust an expert: Research their background to see if they can be trusted. Keep pulling the leads until you find the most objective information possible.
A very direct example relates to this article: There is a small misrepresentation, an indirect lie, behind the mystery story.
The truth behind the puzzle
Perhaps by now, after reading almost the entire text, you thought it would be interesting to explain Warren Buffett’s tale to friends for entertainment or to act out in the evening for a while. “Look at the riddle of Abraham Lincoln.”
However, if you want to accept the significance of the mystery, the first step should be to question Buffett’s knowledge. Did Lincoln really create this puzzle? And with a little research you discover that although there are documents showing that the legendary president of the United States used the example puzzle, he actually borrowed it from someone else.
Its author may be John W. Hulbert, a member of the New York Society at the beginning of the nineteenth century. As Quote Investigador, a page that searches for the truth behind the phrases circulating on the net, explains, Hulbert said during a debate that people try to recall things by those who didn’t tell him an anecdote.
This anecdote, which could have been Hulbert’s invention, was led by a friend of his priest who interviewed a supposed teacher. This teacher was very young and the priest suspected that he was cheating on him. He asked him: If you call the tail of a sheep a leg, how many legs does the lamb have? The young teacher answered 5, and with this the priest had enough evidence that the boy lacked the knowledge and maturity to teach.
As you can see, even the original puzzle was a little different, with a sheep actually being from a dog. What would happen if you decided to question advice, knowledge, or other beliefs that you have taken as authentic and indisputable?