Which are the top stocks in India that pass the Warren Buffet filter?
As per Equitymaster's Stock Screener, these stocks could potentially meet Warren Buffett's investing criteria.
Much of Buffett's success has been attributed to his knack for picking companies with sustainable competitive advantages and holding them for very long periods of time.
Investors across the world are inspired by Buffett's ability to pick winning stocks that deliver long term returns.
There are other parameters you should take into account as well before forming a hard opinion on the stock.
Who is Warren Buffett?
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century.
Warren Buffett is the primary shareholder, chairman and CEO of Berkshire Hathaway and consistently ranked among the world's wealthiest people.
He was ranked as the world's wealthiest person in 2008. In 2012, American magazine Time named Warren Buffett one of the most influential people in the world.
Buffett is called the "Wizard of Omaha", "Oracle of Omaha", or the "Sage of Omaha" and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.
Warren Buffett is also a notable philanthropist, having pledged to give away 99% of his fortune to philanthropic causes, primarily via the Gates Foundation.
What is the Warren Buffett style of investing?
Warren Buffett is undeniably the most successful investor of our time. He believes in value investing.
Value investing is an investment approach that allows one to profit from undervalued stocks. It is based on the idea that each stock has an intrinsic value, i.e. what it is truly worth.
Through fundamental analysis of a company, we can determine what this intrinsic value is.
If the intrinsic value is higher than the actual stock price of the company, then the stock offers an investment opportunity. It's like buying a Rs 100 note, for Rs 80.
Conversely, if the intrinsic value is lower than the current market price, then the stock is 'over-valued' and should be avoided. Think of a Rs 100 note selling for Rs 120.
Which are Warren Buffett's top stock investments?
Much of Warren Buffett's success has been attributed to his knack for picking companies with sustainable competitive advantages and holding them for very long periods of time.
Here are some of his favorite stock investments over the years.
- Apple Inc.
- Bank of America
- Coca-Cola
- American Express
- Kraft Heinz
- Wells Fargo
- JP Morgan Chase & Co.
- Moody's
- Goldman Sachs
- General Motors
Majority of the companies that Warren Buffett and his team have bought were dividend payers.
Dividend stocks are often profitable, have time-tested business models, and usually have transparent outlook.
Most of the stocks from the above list have had dividend payouts and are the silent heroes that have been padding Warren Buffet's pockets for decades.
Which are the books recommended by Warren Buffett?
Over the years, Warren Buffett has recommended many books in his annual shareholders letters.
Here are a few -
- Poor Charlie's Almanack by Charlie Munger
- The Intelligent Investor by Benjamin Graham
- Mitek: A Global Success Story, 1981-2011 by Jim Healy
- A Few Lessons for Investors and Managers from Warren Buffett by Peter Bevelin
- Tap Dancing to Work: Warren Buffett on Practically Everything by Carol J. Loomis