While the world is trading videos of Warren Buffett dispensing various pieces of investment advice to celebrate his fiftieth year at the head of Berkshire Hathaway Inc. (NYSE: BRK.A), (NYSE: BRK.B), we here at LearnBonds are going to offer something a little different. Have a look at the following video, an explanation of the workings of the stock market.
The video goes a long way toward providing answers to the nitty-gritty questions of how the stock market functions from, “What are those people on Wall Street shouting about?” to “Who am I buying this stock off of?” The market is very different from the way it was when Warren Buffett started off with Berkshire Hathaway, but if you want to do something properly, you’ve got to learn how to do it slow, then learn to do it fast.
Warren Buffett’s legacy remembered
This weekend saw the legendary gathering in Omaha Nebraska celebrating 50 years of Warren Buffett’s leadership at Berkshire Hathaway. Possibly the greatest common stock investor of all time, Mr. Buffett is a big fan of the kinds of companies featured in the above video. Those that do material things that have the opportunity to expand.
Mr. Buffett regularly talks about his affinity for big consumer brands. Berkshire Hathaway owns a big chunk of the Coca-Cola Company (NYSE:KO) and owns the entirety of Dairy Queen.
The investor has spent more time defending himself and the practices of his companies in recent months as a partnership with 3G Capital raises questions about his ethical stance on cost-cutting and questions into his operation of a mobile homes business that originated mortgages in what a recent investigation by the Seattle Times investigation concluded was a predatory manner.
Explaining the stock market
Whatever about current business practices Warren Buffett will remain a legend of commons stock investing and to understand how he became so good, there are worse starts than watching the above video. If you really want to know how Mr. Buffett came to have a solid understanding of the stock market, however, read the book the Intelligent Investor by Benjamin Graham.
That’s the work that Buffett says is foundational to his study of the stock market, and the book that he says everybody should read before taking a chance on picking stocks.