Want to invest in ASX shares with the same kind of success as Warren Buffett?
Me too!
Although he started off with almost nothing, Warren Buffett has managed to amass a personal fortune north of US$100 billion.
And the 92-year-old CEO of Berkshire Hathaway didn't do so by making wild speculations.
Now, while I've got a decent-sized ego and some high hopes for my investing returns over the next few decades, it's not very likely that I'll match his phenomenal success in the stock markets.
But that doesn't mean I can't learn some important lessons from his brilliant career to help build my wealth over time buying ASX shares.
With that said, here are two very simple Warren Buffett tests anyone can perform before deciding whether or not to buy new shares.
Time is your ally
The Oracle of Omaha is not one to jump in and out of stocks hoping to make a quick buck timing the market. He's a long-term investor, not a day trader.
One of the Warren Buffett sayings I keep in mind when looking at ASX shares is, "Our favourite holding period is forever."
Of course, that doesn't mean I'm going to hold onto every stock I buy forever.
But it does mean it's worth considering the reason Berkshire Hathaway's top holdings are Apple Inc, Bank of America Corp, Coca-Cola Co and American Express Company.
These are companies that are highly unlikely to disappear over the next 10 years. Indeed, there's a good chance their market dominance will only increase with time.
If I can't say the same thing for an ASX share, I'll consider steering clear.
Which brings us to the second Warren Buffett test I keep in mind before buying any new companies.
Why Warren Buffett never bought cryptos
Plenty of people made plenty of money investing during the crypto boom in 2020 and 2021.
And plenty of people lost plenty of money when that bubble burst.
But you won't find Warren Buffett on either side of that ledger.
That's because another one of his famous investment mottos is, "You don't have to be smart as long as you stick to what you know."
That's seen Warren Buffett not only steer clear of cryptos but plenty of other stocks that he didn't understand well enough to judge the prospects of long-term success.
That's a valuable lesson for every investor.
To assess a company's future prospects, you need to know what it's doing today and how it will remain profitable tomorrow.
