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Good Interpretations on Buffett Principles

Warren Buffett on camera provides much useful personal finance and investing advice to the general public.

Some folks actually tally them up into info graphics which is quite useful. If you find this post interesting do share it with your friends to educate them.

It is true that folks today spend much more on frivolous purchases. It is how you build a habit to be able to live on less.

Even the most staunch frugals will go off when they develop particular nasty habits. 

Insurance or financial advisors have an incentive to fleece  you most of the time. Be careful.

That is just too much work. Not many people are willing to spend time doing that. Does that mean having a financial future means you need to spend so much time? Perhaps passive investing is the key.

I have this problem with a lot of folks. When I tell them buying STI ETF may lose money in the short term they will just be tuned off.

This is difficult from a habit point of view. Given a little bit less reward, people would rather take that now than a potentially larger reward 1 year from now.

Be careful. Even quality business loses their mojo. It is your job to watch it with a good risk management matrix.

People tend to overpay for quality business as well. And people have many different perception of what is quality.

Musicwhiz focus on 6 stocks or less and that creates less tension in daily life and makes investing much more like owning businesses. I should learn that more.

A theme that I only understand more as I mature as an investor is that you are a capital allocator investing in business ran by people that needs to allocate capital.

In the book Outsiders, it illustrates that the most important fundamental determinant of an individual and a group is really capital allocation skill.

Build frameworks in your head to prepare you for this.

This is very debatable.

For those interested in tracking my most current holdings, you can review my portfolio over here. Learn to use our Free Stock Portfolio Tracking Google Spreadsheet to track stock transactions.


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Sunday 24th of March 2013

Hi Drizzt just want to ask you what is the rationale behind the ideal situation of having ROE equal to ROCE? Is it because so as to ensure that any money borrowed is being used to generate earnings for the shareholders?


Saturday 23rd of March 2013

Why did you remove my comment? I would like to read the original article where the infographics were used. Please provide references.


Saturday 23rd of March 2013

I will provide the comment after I approve the post. It takes time


Saturday 23rd of March 2013

Please provide references to the infographics you used in this blog post.


Saturday 23rd of March 2013

ROE and ROCE dont bear a two factor equation, I believe.

How can the relationship between ROCE and ROE be established without factoring in the cost of debt? Kindly advise.



Saturday 23rd of March 2013

hi Lee what do you mean? ROCE usually is pretty close to ROA.its just the base factors in debt (not cost of debt)

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