Warren Buffett Speaks

I'm asked all the time about making money in the stock market. Well, I'm no expert... I'm still working on it. But plenty of people are and Warren Buffett is one of them. He is arguably the world's greatest stock investor and a bit of a philosopher. He pares down his investment ideas into simple, memorable sound bites. So lets look at them, shall we?

Rule No. 1: Never Lose Money.
Rule No. 2: Never Forget Rule No. 1.

Buffett lost about $23 billion in the financial crisis of 2008. So how can he tell us to never lose money?

Its the mindset of a sensible investor. Don't be frivolous. Don't gamble. Don't go into an investment with a cavalier attitude that it's OK to lose. Be informed. Do your homework. Buffett invests only in companies he thoroughly researches and understands. He doesn't go into an investment prepared to lose, and neither should you.

Buffett believes a successful investor doesn't focus on being with or against the crowd. He remains focused on his goals.

Rule 3: If The Business Does Well, the Stock Eventually Follows

Buffett knows that investing in a stock equates to owning a piece of the business. So Buffett seeks out businesses that exhibit favorable long-term prospects. Does the company have a consistent operating history? Does it have a dominant business franchise? Does the business generate high and sustainable profit margins? Finally, is the company's share price trading below expectations for its future growth?
If so, it's a stock Buffett may want to own.

Buffett never buys anything unless he can write down his reasons why he'll pay a specific price per share for a particular company. Do you do the same?

Rule 4: It's Better to Buy a Great Company at a Fair Price Than a Fair Company at a Great Price

Buffett is a value investor; he likes quality stocks at rock-bottom prices. His goal is to build more operating power by owning stocks that generate solid profits and capital appreciation for years to come. During the recent financial crisis, he stockpiled great long-term investments by investing billions in names like General Electric and Goldman Sachs.

To pick stocks well, set down criteria for uncovering good businesses, and stick to their discipline. For example, seek companies that offer a durable product or service and also have solid operating earnings and the germ for future profits.
Or, you might establish a minimum market capitalization you're willing to accept, and a maximum P/E ratio or debt level. Finding the right company at the right price -- with a margin for safety against unknown market risk -- is the ultimate goal.

Remember, the price of a stock isn't the same as the value you get. Successful investors know that.

Rule 5: My Favorite Holding Period Is Forever

How long should you hold a stock? Buffett says if you don't feel comfortable owning a stock for 10 years, you shouldn't own it for 10 minutes. Even during recent times, Buffett loyally held on to the bulk of his portfolio.

Unless a company has suffered a sea change in it's prospects, such as impossible labor problems or product obsolescence, a long holding period will keep an investor from being too fearful or too greedy. Fear and greed cause investors to sell stocks at the bottoms or buy at the peaks -- thus destroying portfolio appreciation for the long run.

From Stephanie Loiacono and investopedia.com

The recent financial meltdown didn't change anything. The unfussy sayings from the Oracle of Omaha still RULE! So you see, we don't have to be experts when we already have them in our back pockets.

P.S. I do wonder, though, how Mr. Buffett would fare if truly lost everything.

I listened recently to a radio program about the the "letters" of great men and women. Down through the ages, the written letter has given insight and solidity to the people that fill our histories. Through the letter, we are privileged to catch a glimpse of their inner workings.

Interestingly, it is the letters they DIDN'T post that often reveal the most about them. The next day, before the postmans arrival, they were reconsidered and tossed in a drawer or box... never sent to their recipient. More than a few reputations have been saved because of the unsent, hand-written missive.

One of the unseen impacts of electronic communications is that we guard our words less and less. We don't speak with significance or care, and we write well-considered letters far less than in the past. Some of us may have simply stopped doing so. Electronic "laziness" has set in, frankly.

But, that doesn't eliminate the power of the word. Modern arrogance does not remove the onus of being earnest and saying what matters. Firing off whatever pops into your head, trying to "keep it real" or be spontaneous... well, that is a poor salve for being insincere.

So, I recommend you attempt to treat ALL the things you write as serious. Everything you write in internet forums or post to your blog, for example, can be seen by the world. The internet has given us far more exposure than our predecessors ever had; millions of people can read what you say in the electronic age. And our words last a long time - I recently googled a topic, and stumbled over something I myself had written years before. Obviously, this makes it all the more important to be aware of the impact your words may have.

So, if you want to avoid membership in the "Foot-In-The-Mouth Club," behave as if you are writing a letter each time you begin clicking the keys. Consider what you say and how you say it, expecting that it cannot be retrieved or undone once you hit "SEND."

SUCCESS TIP: Do you want to really make an impact on someone? Send them an old-fashioned letter, card, etc. You WILL be remembered for it - I guarantee it..

HOW TO KILL YOURSELF

Rocker Tommy Lee once said, "We're not here for a long time, we're here for a good time!" You tell 'em, Tommy.

Many of us follow his lead every day by shunning the most basic principles of Darwinian evolution, trying to kill ourselves through food, toxins and all manner of reckless lifestyles. If you'd like to get in on the act with Tommy, here are the Top Ten surest paths to self-destruction. Who needs a life worth living, any way?

10. Sacrifice Sleep
Inadequate sleep (less than 7 or 8 hours a night) has been tied to many different health problems, including obesity, diabetes and cancer. Mental fatigue is an equal risk factor for vehicular accidents as alcohol. SO burn that candle at both ends. And just think of all the time you'd have for destructive behavior if you stopped sleeping altogether! Eureka!

9. Ignore the Doctor
If you don't want to hear the doctor denounce the rest of these tips for self-destruction, just don't go. Early disease detection and important medical consultation will surely get in the way of your Tommy Lee lifestyle.

8. Dumb Down Your Brain
Reading, doing crosswords, tackling sudokus and other brain stimulating activities are known to ward off the effects of Alzheimers and other forms of senile dementia. So, forget trying to be smarter if you want to live a short life. Just let your brain rot, instead. The rest of you wont be far behind.

7. Sex
Sex in itself isn't bad... it's how you do it that means life or death. The smart self-destructor doesn't use protection, ignores the partner's sexual history and shuns the annual medical exam. Twelve million Americans contract sexually transmitted diseases every year, many of which leave the victim infertile. Killing yourself and preventing new births? Now there's a win-win!

6. Drive a Lot
If you want to increase your chance of living to a ripe old age, fly everywhere. Driving kills more people, aged 1 to 35, than anything else. Stay home and this becomes a non-existent threat. But what fun is that?
So hit the road and hit the gas. While you're at it, text on your cell phone, eat fast food AND neglect to buckle up.

5. Drink a Lot
The occasional drink of alcohol, especially red wine, can be beneficial to your health. But if you want to do yourself in right, overdo the two-drink-per-day limit. If you're lucky, you might become an alcoholic, contract diabetes AND get liver damage, too!

4. Stress Out
Creating more stress in your life is a great way to invite all kinds of diseases to attack the body. Chronic stress inhibits the immune system and allows disease to attack. So, if you wanna check out early, worry about everything from the color of your socks to whether dinner will be ready on time.

3. Watch More TV
Not only is television entertaining, it keeps us on the couch for hours at a time. The average American spends a full 9 years of his life glued to the boob tube. You could go ride a bike or take a walk, but that might be healthy - an we can't have anything but a wasted, sedentary existence if we want kill ourselves.

2. Smoke Tobacco
Tobacco-related illnesses are America's number two killer. So, if you really want to die early and leave your loved ones behind, light up. Just one cigarette will immediately increase your blood pressure and decrease the circulation to your extremities. Imagine what you could do with a pack!


1. Eat Junk
Here you go, number one. This isn't to say that eating healthy will undo the other nine destructive life behaviors. But, last year, at least 400,000 Americans killed themselves based almost solely on what they ate. Looking for the most effective, probably most enjoyable way to do yourself in? Have another doughnut... hell have six a day. And make them cream-filled!

Taken from the LiveScience.com website

I thought this was interesting enough to add here at "Key Thoughts" this week. Essentially, it describes in detail the old adage that..."You are what you think."
Carefully choose the things you think, and here I mean selectively control what goes through your mind - and you program yourself to achieve success?
Very interesting.....

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Autosuggestion and Controlled Attention
by Napoleon Hill

You are influenced by, and you are a part of, the dominating circumstances of your daily environment. The medium by which this takes place is known as autosuggestions (suggestions you make to yourself, either consciously or unconsciously).

Autosuggestion records in your memory every thought you express, and makes it a part of your character, whether the thought is positive or negative. It records every word which is spoken within your hearing, and gives it a positive or a negative meaning, according to your reaction to it.

Autosuggestion records your thought reactions to everything you see or recognize through any of the five physical senses, and it records the “feel” which you pick up from your physical surroundings.

The objects on which you deliberately concentrate your attention become the dominating influences in your environment. If your thoughts are fixed upon poverty, or the physical signs of poverty, these influences are transferred to your subconscious mind through autosuggestion.

If the habit of concentrating on poverty is continued, it will result in conditioning your mind to accept poverty as an unavoidable circumstance, and you will eventually become poverty-conscious. This is how millions of people condemn themselves to a life of poverty. Remember this, you who would have opulence.

The principle of autosuggestion works in precisely the same manner when your dominating thoughts are fixed, through controlled attention upon opulence and economic security. This habit leads to the development of a prosperity consciousness without which no one may hope for economic security.

It is obvious, therefore, that when you voluntarily fix your attention upon a definite major purpose of a positive nature, and force your mind, through daily habits of thought, to dwell on that subject, you condition your subconscious mind to act on that purpose. As we have stated repeatedly, the subconscious mind acts first on the dominating thoughts placed before it daily, whether they are positive or negative, and proceeds to carry out those thoughts by translating them into their material equivalent.

Source: PMA Science of Success. Pgs. 345-346.

The Four Steps to DOING Anything.

In the movement to "DO" in our lives, i.e., to get out and create action, we often encounter stumbling blocks. Some we cannot do anything about, they just exist. We push on and keep moving to get past them - THAT is what ultimately makes us great.

But many of the challenges we face are simple and basic - and which we tend to blow out of proportion. The French philosopher Michel Eyquem de Montaigne, wrote in the 1500's, "My life has been filled with terrible misfortune; most of which never happened."

We worry, or we get caught up feeling inadequate or we just stall in place - paralyzed by what we see as insurmountable problems. But the truth is, we come equipped, for the most part, with the intelligence and the tools to do most anything we desire. What is needed, then, is a fingertip method to keep us moving past those "stalling moments" which paralyze it.

SO here is my favorite technique to keep from getting bogged down in problems. It is based in the balance between personal power and having none. When a person acts from personal power they see things for what they really are and they take action. They don't bog down in emotions, or trying to find reasons why something CAN'T work.

Power Position Solutions

+ Step One: Dream
This is the first step towards using power to control your outcomes. So if you want to DO something, Step One is to first ask yourself:

"If this situation were to turn out the way I want, what would it look like?"

Then, spend a moment or two imagining the OUTCOME you want.

But don't spend too much time at this dream phase. While it is sometimes comforting, dreaming is ineffective in itself.

But a dream that becomes vision is the first first step towards seeing a problem for what it really is. After all, you can't hope for change if you don't see the need for it!

+ Step Two: Acknowledge Reality
Okay, now you're getting somewhere! In Step Two, you must acknowledge reality. You are not an ostrich hiding your head in the sand - you are a human being, trying to make something happen!

So, in Step Two, stop and SAY out loud:

"This is the reality of the situation. These are the problems I face, the needs I have and the help I need if I am to achieve what I set before me."

Actually say this aloud to yourself, don't cheat and mutter it under your breath. If you need to go somewhere private to do so, then go ahead.

Don't hide from these things; don't be afraid to write them all down. The person who says, "It is, what it is," is far closer to doing something than one who only complains. Once you acknowledge the reality of your situation, you'll find that YOU begin to change for the better. Once that happens, you are primed to affect your own outcome.

+ Step Three: Find Solutions
This is where it all leads - ACTION. The other things are important but they only shine a light on an issue or problem. In themselves, they do nothing but illuminate what you must DO.

Step Three - Write down all possible solutions

Notice, saying them aloud isn't enough. Now you must write these things down. This is called 'brainstorming' and it is where you face ALL possible solutions... not just the ones you like.

Some solutions may be hard or require things you do not currently have, so you must work to make them happen. Often these are the right solutions, even if not the easiest. So you must write down your options and evaluate them on their own merit. DO not be afraid to enlist the aid of someone else, either. They may see things you don't.

But, once you accept and adopt solutions, you change the situation for good. It is no longer what it was - this is where opportunity opens up for you. So put the solutions you decide upon into action.

+ Step Four Get On With It.
This is the ultimate point of all this... to move forward. SO Step Four is to move on from the problem.
Once you have acted on your solutions, you can step forward. Perhaps it will take some more planning to get the actions well along. Or maybe you need some more resources or tools. That's okay, it;s al part of the solution. I will talk mre in a future post about the ways to put solutions into effect.

But remember, the final goal here is to place your problems on the "To Monitor" list.
This means they no longer absorb your energy and worry, but only require occasional input and minor effort to keep going forward.
As Winston Churchill said, "To improve is to change; to be perfect is to change often.

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Of course, there is nothing to force you to use the Power Position Solutions.
So what happens if you don't?

Well, every Power has its powerless opposite. While Power Position Solutions give you good reasons for what you do, the Powerless Position leaves you with little more than excuses. Simply put, nothing changes and you get nowhere. But, hey... at least you'll have plenty of arguments why.

Powerless Solutions

+ Wait and hope
Waiting an hoping is the first step to failing. Sadly, too many people think it is a solution by itself. While hope often gives temporary comfort, waiting is ineffective in itself. It also tends to place the results outside the individual.

That is, if things go good, it is because someone or something else did it, since all you did was wait and hope. If things go badly, well, then the same thing applies.

+ "I can't" - These two words are responsible for more frustration that any other. Once you begin uttering, "I can't..." phrases, you soon develop excuses as to WHY you can't. Before long, you convince yourself of your own inadequacy and develop elaborate rationale to back it up. All this emotional investment has it's own reward, since before long you are convinced that you cannot.

"Whether you believe you can, or you can't... you are right" - - Henry Ford

+ Blaming others - Once you convince yourself that you cannot... you then find others who are part of your downward spiral. Either they caused your failure or they are holding you back. This can be anyone, from your family to the President, even Society at large. But normally there is a face associated with this blame.

Regardless, once you've come this far, there is always someone else who is at fault besides YOU. Rather than acknowledging reality and searching for solutions, it is easier to put the blame on others.

+ Unaware/Unconscious - This is the ultimate Powerless Position. We call it denial, these days. You push the situation so far back in your mind and camouflage it in such a tangled web of blame and self pity that it is finally subverted. In the end, you turn your back on the problem and try to live as if it didn't exist.

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So as you move to DO and accomplish things in your life, remember that it is Power that gets you there. Try the four steps of Power Solutions and see if they don't kick start your efforts to GO, DO and BECOME!.

Talking to Friends about Your Business.

This is from Michael Oliver, who is the driving force behind the "Natural Selling(R)" program. I thought it was good enough to include here, since it has some wide ranging applications in both life and business. I hope you enjoy it.

"When I talk with Network Marketers and Direct Sales People, it's
surprising how many are reluctant to talk with friends and family
about their business.

I guess it's understandable in many ways, because they don’t want
to run the risk of alienating those close to them.
If this happens to you, it does mean you're missing out on a
source of high quality business partners and customers.

Perhaps even worse, they might need what you have to offer and
they're missing out because you haven't spoken with them about
it.
(The story is always told of the insurance man who didn't sell his friend a policy, because he didn't want business to ruin their friendship - and then the friend promptly dies, leaving nothing for his family to live on.
The bereaved widow, who is destitute, now despises the insurance man - for not selling life insurance to her husband, the man he called his friend.)

So, what's the solution so that everyone wins? Here are some
suggestions.

1. Keep in mind the first principle of Natural Selling. That is, your purpose is to help other people solve their problems. When you're talking with friends, or anyone come to that, all you're looking to do is to discover if they have the types of problems you can help them solve. That's all.

2. Before approaching a friend, take some time to prepare yourself. Think about everything you know about them. Write down everything you can about their family, their hobbies, their sports, their jobs, their relationships, and especially their likes, dislikes, passions, and so on.

3. Write down all the problems you might have heard them talk about, that your business might be able to solve. Things like health problems or tight finances, and think, if you can, how it’s affecting them.

These are the things you can explore further when you next speak with them.

Now, when you do speak with someone keep in mind the following...

* Respect the relationship that is already there. What’s more important? Your friendship or wanting them as a business partner?

* Explore their previously expressed problems or see if they do have the types of problems you can help them solve without necessarily talking about your solutions.

* Let go from talking about your business opportunity. Your first aim at this stage is to simply discover if you might be able to be of help. If in the course of your conversation it becomes clear your friend or family member might have an interest in changing their present situation, then you can offer your solution there and then, or continue the dialogue at another time.

If you adopt this approach, you won't run the risk of upsetting people. You'll be pleasantly surprised at how many of them will be open to listening to you."

Michael Oliver
Natural Selling® Sales Training
For Personal & Business Success

Find Michael at www.NaturalSelling.com

"Moderation is a fatal flaw. Nothing succeeds like excess." - - Oscar Wilde

Did you get that? Read that again.

Now there, folks, is a real secret to getting ahead in whatever you do. "Gurus" and "mentors" the world over tell you the same thing. They devote books to it, they charge huge sums to attend their seminars to teach what Mr. Wilde has said in nine words.

The message of course is this: You must have passion, committment, involvement, immersion, perhaps even obsession, if you are to ever achieve anything worthwhile.

All the greats at anything do it - they don't go at "their thing" half way. They pursue it to its ultimate possibilities, without distraction.

Take Tiger Woods for example. Since the age of 3 he gave his all to the game of golf. Maybe part of it was his father pushing; if so he can thank his Dad for that. Regardless, as time went on the passion to be the best took hold. Look where it has gotten him.

So, if you want to be successful, or get ahead or "achieve" that which is important to you, then you had better not half-ass it. Accept no excuses from yourself or anyone. Give it your all, and dont let up.