Real Estate Investor Magazine South Africa Real Estate Investor Magazine - June 2017 | Page 13

or project in which you are investing is one of the first
items on your to-do list to check off.
So, what does Berkshire Hathaway look for?
There’s no way to know, for certain, what Berkshire
Hathaway takes into consideration when deciding
which companies to invest in. From correspondence
with investors over the years, however, Buffett lays
out several criteria when choosing companies to invest
in or acquire.
One of Berkshire Hathaway’s first points when
choosing acquisition targets is that the business must
be large. In Buffett-terms, this means the company
has annual pre-tax earnings of at least $75 million.
Secondly, the company needs to be consistently
profitable. This shouldn’t come as much of a surprise,
given Buffett’s track record. The third point is that
the company must have little to no debt, while still
producing good returns.
Buffett’s fourth criterion is that good management
is in place. This, of course, also means that good
managers are in place. The success of a company
largely depends on the quality of those in charge. The
fifth one relates to something that’s been discussed
many times before: Buffett only invests in a company
he understands. The last point raised is that there
must be an offering price on the table.
The take-away
To be successful in any business, it is essential to be
aware of the bigger picture and adapt accordingly. In
an increasingly globalised and fast-paced world, we
need to keep an eye on emerging trends and markets.
With this, we can also learn much about possible
pitfalls and opportunities from those who have
already made a name for themselves in the investment
world.
Buffett is probably most famous for his humorous
insights, timeless advice to investors and business
owners, and commentary as to what works and what
doesn’t.
This collection of 10 quotes (published first on The
Motley Fool) represents the best pieces of personal
finance advice Warren Buffett has ever given.
10 BEST MONEY TIPS FROM
WARREN BUFFETT OF ALL TIME
1 Never lose money

Warren Buffett’s most important piece of advice for 2017 is
one he follows as closely as he can: “Rule No. 1: Never lose
money. Rule No. 2: Never forget rule No. 1.” This rule applies
readily to investing, if you’re working from a loss, it’s that
much harder to get back to where you started, let alone earn
gains.
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WARREN BUFFETT