Never invest in a business you cannot understand.warren buffett

If you pay too much for a company, your investments might take a hit later on.
Risk comes from not knowing what you are doing."
The advice here is obvious but often forgotten, particularly after investors have had some success. The temptation to believe that success in one area you know well allows you to easily analyze another is much greater once you’ve had some good returns, but should be resisted.
Warren Buffett himself has kept out of the technology sector for the most part, given his lack of knowledge of the sector. Buffett said it best:
Never invest in a business you cannot understand."
Warren Buffett has always held strong to the belief that index funds are one of the best ways to grow wealth. They are inexpensive and are not closely linked to how well one entity is predicted to fare.
Plus, individual stocks cost more so advisors will keep a larger percentage of earnings. Buffett says:
Do not take yearly results too seriously. Instead, focus on four or five-year averages.
Yearly averages will not give you much insight into the success of an investment. Instead, comparing data across a number of years will provide you with a much bigger picture that you can use to make necessary adjustments and continue moving forward.
Just as time is your friend, it is also the friend of any great company. Because with time, any wonderful company begins to age like fine wine:
Time is the friend of the wonderful company, the enemy of the mediocre.
Why not invest your assets in the companies you really like? As Mae West said, 'Too much of a good thing can be wonderful
Again, being choosy is not necessarily bad. Think back to your punch card. If you can only use 10 punches for the rest of your investing career, you'd think twice before making a decision. Do some research on companies that follow similar belief systems to your own, operate effectively, and have growth plans that closely match your own.
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The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective
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