Warren Buffett is one of the most successful investors in the world, and his capital management principles are well studied.
1. Rule #1: Never lose money. Rule #2: Never forget Rule #1
Buffett believes that the main thing in investing is capital preservation. Risk must be calculated.
2. Invest in what you understand
He avoids complex financial instruments and invests only in businesses he can analyze.
3. Long-term ownership is the key to success
Buffett holds stocks for decades (for example, Coca-Cola, American Express).
4. Buy undervalued companies with a 'moat'
A 'moat' (competitive advantage) is a sustainable advantage of a business over its competitors.
5. Be greedy when others are fearful
Crises are the best time to buy.
6. Avoid debt
Buffett rarely uses borrowed funds and advises living within one's means.
7. Invest in yourself
He believes that the best investments are in education and skills.
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