Buffett VS Wall Street

In this post, Lets see the different in beliefs between Buffett and the rest of other fund managers, which turn Buffett into God in stocks market yet other don't.

Wall Street belief:

• Believes in broad diversification into numerous financial instruments.
• Short-term performance focused. Buys when a stock's price is rising (good news) & sells when a stock is falling (bad news).
• Prejudice against companies who don't pay dividends.
• Pressured to invest funds
• Believes that in order to achieve higher returns, you must takehigher risks

Buffett belief:

• Believes in concentrating his funds in a few core businesses thathe understands very well.
• Long-term value focused. Buys good stocks when the price isfalling (bad news) & sells when the price is rising (good news).
• Prefers company to retain its earnings & allow his wealth tocompound tax-free
• Invest only when there is a high probability of profits.
• Believes it is possible to achieve high returns with very lowrisks.

The reason why Warren Buffett is able to consistently beat themarket of average investors & money managers is because he holdsvery different beliefs and philosophies about how the markets work. Through studying these differences, one can see clearly how WarrenBuffett invests and you can do the same too.

"I have enjoyed the process far more than the proceeds, though i have learned to live with those, also" -Warren Buffett.