If you're new to investing in ASX shares, then following Warren Buffett's investment philosophy could be a great way to start your journey.
After all, the Oracle of Omaha has generated staggering returns over multiple decades.
For example, in his most recent annual letter, Buffett revealed that Berkshire Hathaway's market value per share has increased by an average of 20.1% per annum from 1965 to 2021. This means that Berkshire Hathaway has returned 3,641,613% over the 56 years, which would have turned a single one dollar investment into over $3.5 million.
But can I invest like Warren Buffett?
Warren Buffett's investment philosophy is centred on finding undervalued companies with strong competitive advantages and holding onto them for the long term. He looks for companies with steady and predictable earnings, strong balance sheets, and management teams that align with the interests of shareholders.
In addition, the legendary investors is known for being patient and disciplined in his approach to investing. Buffett is willing to wait for the right opportunities and is not swayed by market fluctuations like we're experiencing today or short-term trends.
He famously quipped:
I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
Buffett also considers intangible factors when making investments. He looks for companies with strong brands and a track record of ethical behaviour. The Oracle of Omaha has a long-term horizon and believes that investing in companies with strong values and a commitment to their stakeholders will ultimately lead to better financial returns.
Overall, Warren Buffett's investment style can be summarised as a combination of value investing, long-term thinking, and a focus on companies with strong fundamentals and good management.
Now could be the time to put this into practice with ASX shares.
