3 Warren Buffett Quotes That Will Make You a Richer Investor
I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over
Buffett follows the concept of 'circle of competence' while searching for businesses he would like to invest in. In simple terms, your circle of competence with respect to investing defines your understanding about certain businesses.
The businesses that you understand fall within the circle, and the ones you don't understand fall outside it. Also, you don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence.
As Buffett says, "The size of that circle is not very important; knowing its boundaries, however, is vital."
So look for simple businesses that you can understand (the 1-foot bars) instead of worrying about how you can understand a complex business (7-foot bar), when the people running the show themselves don't understand it!
.jpg "Yuvaraj Finance: Redefining Financial Empower-ment & Innovation for a Dynamic Future")
