Warren Buffett’s Secret to Success Why Great Businesses Come Before Cheap Stocks

Warren Buffett, one of the greatest investors of all time, has led Berkshire Hathaway to astounding market-beating returns, with a market value per share increase of 5,502,284% since he took over. While many investors focus on finding undervalued stocks, Buffett emphasizes that the most important factor is owning great businesses. Here’s why he prioritizes quality over price and which companies he considers top-notch. Key Highlights: Quality Over Price: Great Businesses First: Buffett believes that owning a part interest in a great business is better than owning all of a mediocre one. He often quotes, "It's better to have a part interest in the Hope Diamond than to own all of a rhinestone." Undervalued Stocks Are Secondary: While he looks for fair prices, the primary focus is on the quality of the business. Cheap stocks are only worthwhile if they are great businesses. Criteria for Great Businesses: Large and Profitable: Companies like American Express (NASDAQ: AXP), Coca-Cola (NYSE: KO), Apple (NASDAQ: AAPL), and Moody's (NYSE: MCO) are large, highly profitable businesses with household names. High Return on Equity (ROE): These companies generate high returns on the net tangible equity required for their operations, indicating efficient use of assets. Resilient Under Pressure: They provide essential services that customers need regardless of economic conditions. Recurring Revenue Streams: Companies like American Express and Moody's benefit from recurring revenue, ensuring stable and predictable earnings. Strong Brands: Intangible assets like brand recognition, which you won't find on a balance sheet, are crucial. These brands have a loyal customer base and strong market positions. Examples of Great Businesses: Apple: Known for its ecosystem of excellent products that draw and retain customers. Despite high price tags, Apple consistently sees upgrades and loyalty. Coca-Cola: A century-old brand with a global presence, high sales, and well-managed operations that bring in high profits. American Express: Offers financial products to a growing customer base, generating a recurring revenue stream from annual fees. Moody's: A leading credit-rating agency with a strong reputation and limited competition, ensuring reliable sales and earnings. Long-Term Staying Power: Resilient and Reliable: These companies are often the tortoises of the stock market, providing long-term stability and growth. Dividend Payers: Most of these companies pay dividends, a sign of their financial health and reliability. Why It Matters for Investors: Buffett’s approach to investing in great businesses with strong fundamentals and high returns on equity can provide long-term stability and growth. While Apple is a fantastic company, it’s important to consider a diversified portfolio of similar high-quality businesses for consistent returns. Disclaimer: Always conduct thorough research before making investment decisions. #WarrenBuffett #BerkshireHathaway #GreatBusinesses #InvestingStrategies #Apple #CocaCola #AmericanExpress #Moody's #HighROE #LongTermInvesting Thanks for watching! If you're new here, make sure to subscribe and turn on notifications so you don't miss any of our future videos. If you're interested in learning more about crypto, finance, and gaming, make sure to check out our website,   / nexusfinance   . We offer a wide range of resources and tools to help you navigate the complex and ever-evolving world of crypto and finance, as well as the latest news and insights on the world of crypto gaming. And if you want to support our work and gain access to exclusive benefits, make sure to check out our Patreon page:   / nexusfinance   Here are some other links that you might find useful: Use this unique invitation link to sign up for Trade Republic and receive a bonus, and start letting your money work for you: https://ref.trade.re/x0gpnjw2 Safeguard Your Crypto w/ a HardWare Wallet: https://amzn.to/3hnThBw Join Womplay and earn NFTs: https://womplay.io/?ref=A7G6TBE Disclaimers: Past Performance Is Not indicative of Future Results: There are no guarantees that it will continue to perform similarly in the future. Market conditions, economic factors, and company-specific risks can all impact returns. Not Financial Advice: This content is for informational purposes only and should not be construed as personalized investment advice. Always consult with a licensed financial advisor before making investment decisions.