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Jeff Mathews on Buffett's Business and Investing Secrets

April 27, 2011 | About:

This weekend, Berkshire Hathaway is having its annual shareholders’ meeting. About 40,000 people are going to attend the event. The event stirs interest on the subject on what secrets Warren Buffett has when coming to investing.

Jeff Mathews, a Buffett biographer, wrote a new book Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett. He was seen on Yahoo! Daily Ticker today talking about Buffett’s secrets:

1. Ignore stock price... at first. "Buffett doesn't look at the stock price when he's evaluating a company," says Matthews. Obviously, stock price is the first thing most people look at when deciding to invest. Instead, Buffett reads up on the company, does the analysis and then looks at the stock price. If, after doing the research, he finds the stock to be undervalued, then he invests; if it's overvalued, he passes. "It's a very profound and different way" to approach investing.

2. Ignore the noise. Buffett doesn't have a quote machine in the office and largely ignores the media. "He's out in Omaha, Nebraska. He's not in the middle of New York City constantly getting hit with all this extraneous stimuli, which enables him to focus," Matthews notes.

3. Read everything. Knowledge is power, something Buffett recognized at a young age. By the age of 10, Buffett had read every finance book in the Omaha library. His appetite for reading has never waned; Matthews says it's probably Buffett's favorite hobby.


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