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Value Investing - The Strategy Used By The World's Greatest Investor

Aug 27, 2008
Value Investing is the strategy employed by the world's greatest investor and also the second richest man in the world, Warren Buffett. I was first inspired by Buffett's ability to make money in the markets when I read a book that was written about him in 1993. I was so amazed by this man not just because he was worth US$52 billion (just US$4 billion behind Bill Gates), but because he made all his money without selling a single product or service. He made his fortune purely through investing in stocks.

From a very early age young, Warren Buffett was obsessed with making money and had a very clear dream of becoming the world's greatest investor. Born during the depression when his father was close to bankruptcy, Warren learnt about the value of money and the importance of being financially secure at an early age. Even before his teens, Warren knew that he wanted to be rich, very very rich. As early as elementary school and later on in high school, he would tell his classmates that he wanted to become a millionaire. before the age of 35 (when he turned 35, his net worth exceeded US$6 million). Inspired by his dream, he started researching on the secrets of wealth creation.

Through his readings, he found and memorized a book called 'Thousand Ways to Make $1,000'. At the age of six, he started buying coke bottles at 25-cents per six-pack and selling them at 5-cents a bottle, giving him a 16% gross profit, as he would tell himself. At the age of 13, he got a job delivering newspapers and through innovative marketing and distribution strategies, he served five hundred customers a day (he hired the other neighbourhood kids to do the delivery for him).

At the age of 11, he took all his savings and started investing in the stock market. His first investment was three shares in a company called 'City Service'. While most kids his age were reading comic books, Warren spent his time reading company annual reports. By the age of 14, he invested in pinball machines, which he installed in restaurants all over his town. He was earning US$175 a week, as much as the average 25-year old was earning in 1944. Warren later mastered the art of investing by modelling two of the world's greatest investors during his time, Benjamin Graham (the father of Value Investing) and Philip Fisher (the father of Growth Investing). By combining the ideas of both geniuses and further refining them, Buffett has become the most powerful investor in the world!

Over a number of years, I read almost every single book written about him as well as his annual report to his shareholders, where he reveals his secrets and strategies for finding stocks that will consistently beat the market over time. It was through modeling Buffett's mindset and strategies that I developed my own strategy for 'Value Investing'. I have found that with Value investing, you can expect to achieve compounded annual returns of 15%-25%. At this rate, your money would be doubling every three to four years.
About the Author
Adam Khoo is an entrepreneur, best-selling author and a self-made millionaire by the age of 26. Discover his millionaire investing secrets and claim your FREE bonus chapter of his latest bestselling book 'Secrets Of Millionaire Investors' at Secrets Of Millionaire Investors.
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