How to invest as Buffett intended
A quote that I keep coming back to, and have quoted in my writing on more than one occasion, is the following piece of advice from Warren Buffett:
“Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now.”
The reason I keep coming back to this quote is that earnings growth is the foundation of most happy investing outcomes. In the simplest terms, an investor’s return from each individual stock rests mostly on three variables:
- Dividends received during the holding period
- Increases or decrease in company’s ability to generate profits on a per-share basis
- What value the…
