Reflection: Warren Buffet investment Principles

Well more than eleven (11) years ago I read as much about Warren Buffet as I could find.  My career from a business perspective is an investor.  I figure if I want to be the best investor then I need to learn from the best.  No doubt Warren Buffet is likely the single wises and wealthiest investor living today.  The following are my interpreted business principals that I learned from Mr. Buffet as well as a few other ideologies I've picked up along that way that have brought me to the point I am today and that I utilize to guide my career as a investor:

Rule 1 - never lose money 

Rule 2 - never lose money 

Rule 3 - never lose money 

Other the land or other natural resources always make sure a capable and vested lord stands between you and the investment.  It is only reasonable to hold 1 to 2 investments that you are the direct lord over.  It is best to Lord over one asset class that serves as what I will refer to as a cash cow.  For most people their cash cow is their job career.  

If you have to contribute anything more than cash to an asset then it's not an investment it's a job.  Jobs are good but do make sure you know which financial classification you truly want.

good investments are readily available however they are generally hidden and take significantly more patience and research to discover.       

therefore always perceive your career as an investment and as often as possible attempt to utilize it as the foundation of your investment portfolio    

never take for granted the size of the available funds available for investments.  All things start and end with the number zero.  'Big' or 'a lot' is always rooted in the 'little' 

never use 'size' as the reason to invest or the measure of your success.  Doing so leads to needless intimidation or conversely a spirit of complacency    

purchase investments with a marketing moat.  A moat is the unique aspect or position of the investment that protects it from being commoditized or overly price sensitive    

never purchase investments you don't understand and have a great appreciation for  

use debt sparingly.  When used have a plan to pay it off within two (2) years but certainly no more than five (5).  Use all or most of the returns from the investment to payoff associated debt before moving forward 

be a reader and know the market, research

buy great investments with a current sticker price significantly lower than its current and potential value 

make significant investments and avoid chipping at ideas.  If you are going to get into something than do it in a meaningful manner that makes a significant difference    

purchase investments with a long term hold position in mind.  Invest in assets from a partnership perspective 

it is best to have and seek first and foremost in a major cash cow asset that serves as the foundation of your investment portfolio.  The cow serves two functions first as the bread winner that provides for the stability of the house paying all the personal needs of the investor.  Lastly the cash cow kicks off enough income to not only pay for the personal needs of the investor but a portion is able to be set a side to invest in other assets.  Again for most a great career as an employee, sole proprietor, or partnership is the first cash cow.   

never increase your personal financial needs beyond one to two cash cows.  It is wise to use the after tax profits of your investments to pay off debt or buy more assets  

live modestly and spend far less on life than your ability.  This will strengthen the leverage of your cash cow 

seek opportunities to stay away from all long term debt or pay it off when ever possible 

seek assets that are either designed or have enough financial room to cover partners that carry the responsibility, effort, and liability associated with the opportunity.  The investor will take home less profit from the opportunity however this will allow you to focus your efforts on your cash cow and more importantly life outside of your financial career.       

each investment should lay seamlessly upon the others and not interfere with productivity of each other.  The time burden of your combined investments including cash cow should not exceed 50 hour each week.  Your personal efforts to manage your investments should become smaller and lighter over time.  

use time to your advantage as that is always the greatest and most scares commodity.  It is the only material resource no one can create more of or gain back.  Use time wisely and it will position you a head of the market.   

when ever possible try to purchase investments that will give greater leverage and or influence to your entire portfolio     

Be patient and wait for opportunities that fit your investment principals   

enclosure 

God bless you, 

Martin A. Briggs

KM Briggs, LLC